The United States imposed steep 50 per cent tariffs on India largely because former President Donald Trump was denied the opportunity to mediate in the recent India-Pakistan conflict, according to a report by American investment bank Jefferies.
The report describes these unprecedented tariffs as a consequence of Trump’s “personal pique” due to his exclusion from the diplomatic process attempting to resolve tensions between the two South Asian nuclear-armed rivals.
Background of India-Pakistan conflict
The India-Pakistan conflict started in May 2025 following a terrorist attack in Pahalgam, Jammu and Kashmir, where 26 civilians were killed. India held Pakistan-backed militant groups responsible and launched a military campaign called Operation Sindoor. This involved missile and air strikes targeting militant infrastructure in Pakistan-administered Kashmir and Punjab provinces.
Pakistan retaliated with heavy mortar shelling and missile attacks, escalating hostilities between the two nations. The conflict, marked by drone strikes and air battles, lasted for four days before a ceasefire was agreed on May 10, 2025. The U.S. played a diplomatic role during ceasefire negotiations, but Donald Trump was notably sidelined from mediation efforts, which caused friction.
Trump’s role and US tariffs on India
Jefferies’ report highlights that Trump’s desire to mediate the conflict was rebuffed by India, which firmly opposes third-party intervention in its issues with Pakistan. Trump had publicly claimed credit for resolving international conflicts and suggested he deserved the Nobel Peace Prize for his efforts.
His tweets and offers to mediate on Kashmir were met with resistance from India, which views such attempts as unwelcome interference. The bank states that Trump’s personal annoyance with this exclusion influenced the imposition of the high tariffs on Indian imports, seen as a punitive economic measure.
India’s stance and economic implications
India has maintained a strict “red line” against third-party involvement in its disputes with Pakistan, prioritizing sovereignty over diplomatic mediation from other countries. Despite potential economic costs from the tariffs, India has not relented on this stance. The tariffs have been deemed unjustified and unreasonable by Indian officials.
The Jefferies report also underscores that agricultural trade remains a major sticking point in negotiations, with India unwilling to open its agricultural markets to imports to protect roughly 250 million farmers and agricultural workers, who make up about 40 per cent of the workforce.
Broader trade relations and risks
U.S. Treasury Secretary Scott Bessent noted that India has been somewhat recalcitrant in trade discussions with the U.S. The Jefferies report warns that continued economic pressure through tariffs risks pushing India closer to China, potentially altering geopolitical and trade dynamics. Adding to warming ties, direct flights between India and China are set to resume after a five-year pause starting September 2025, signaling shifting alliances in the region.
In summary, the imposition of 50% tariffs on India is deeply intertwined with geopolitical tensions and unresolved conflict mediation issues between India and Pakistan, influenced heavily by Trump’s sidelined mediation efforts. Economic frictions, particularly over agriculture, and India’s firm stance on sovereignty continue to complicate US-India trade relations, with broader implications for international alliances in Asia.
