MAGA Vs MIGA: Why Trump Imposed 50% Tariff On India? Why Russian Oil Is At The Heart Of Conflict?

Just less than six months ago, both US President Donald Trump and India's Prime Minister Narendra Modi shared warm hugs, potential trade talks, and a vision of MEGA deals. Both Trump and Modi had emphasized on MAGA and MIGA, an initials of their goal to make their country great again. However, times have changed, and relationships have soured with Trump now imposing an additional 50% tariff on India.

The heart of the conflict between the US and India is Russian oil!

TRUMP's 50% Tariff On India:

On August 6, Trump in an executive order, announced an additional 25% tariff on India, taking the total tariff to 50% on India who is a major US trading partner.

"I find that the Government of India is currently directly or indirectly importing Russian Federation oil," Trump said.

"Accordingly, and as consistent with applicable law, articles of India imported into the customs territory of the United States shall be subject to an additional ad valorem rate of duty of 25 per cent," the US' 47th President added.

As per the executive order, this rate of duty shall be effective concerning goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time 21 days after the date of this order, except for goods that (1) were loaded onto a vessel at the port of loading and in transit on the final mode of transit before entry into the United States before 12:01 a.m. eastern daylight time 21 days after the date of this order; and (2) are entered for consumption, or withdrawn from warehouse for consumption, before 12:01 a.m. eastern daylight time on September 17, 2025.

Trump's statement comes a week after he blamed India of buying "a vast majority of their military equipment from Russia, and are Russia's largest buyer of ENERGY, along with China, at a time when everyone wants Russia to Stop The Killing In Ukraine"

This announcement also comes on the day when RBI retained itsgrowth target to 6.5% for FY26, restoring faith in India's economic outlook.

However, RBI governor Sanjay Malhotra also said, "Prospects of external demand, however, remain uncertain amidst ongoing tariff announcements and trade negotiations. The headwinds emanating from prolonged geopolitical tensions, persisting global uncertainties, and volatility in global financial markets pose risks to the growth outlook."

Following his statement on July 30th, Trump had already imposed a 25% tariff on India, and said, "plus a penalty for the above, starting on August 1st."

Why Russian Oil Is At The Centre-Stage Of US-India Conflict?

When the Kremlin attacked Ukraine in February 2022, a host of countries issued sanctions on Russia including US.

An executive order called 14066 of March 8, 2022 (Prohibiting Certain Imports and New Investments With Respect to Continued Russian Federation Efforts To Undermine the Sovereignty and Territorial Integrity of Ukraine), expanded the scope of the national emergency declared in Executive Order 14024 of April 15, 2021 (Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation), to include the actions taken against Ukraine by the Government of the Russian Federation.

The order prohibited, among other things, the importation into the United States of certain products of Russian Federation origin, including crude oil; petroleum; and petroleum fuels, oils, and products of their distillation, the order had said.

In his latest executive order of August 6, Trump said. "I have received additional information from various senior officials on, among other things, the actions of the Government of the Russian Federation with respect to the situation in Ukraine."

He added, "After considering this additional information, among other things, I find that the national emergency described in Executive Order 14066 continues and that the actions and policies of the Government of the Russian Federation continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States."

"To deal with the national emergency described in Executive Order 14066, I determine that it is necessary and appropriate to impose an additional ad valorem duty on imports of articles of India, which is directly or indirectly importing Russian Federation oil," he said.

India On US Tariffs:

Earlier this week, the Ministry of External Affairs of India, said, "Where the United States is concerned, it continues to import from Russia uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilizers as well as chemicals."

India has retorted on Trump's allegations and tariffs as unreasonable.

MEA said, "In this background, the targeting of India is unjustified and unreasonable. Like any major economy, India will take all necessary measures to safeguard its national interests and economic security."

On February 13, both countries leaders had welcomed each other with warm hugs and praises for each other. Tariffs, trade deficit, supply of military equipment, investment strategy and illegal immigrants were key points of the gamut of India-US revamped ties.

In the conference on February 13, Modi said, "Americans are familiar with President Trump's motto, Make America Great Again, or "MAGA." The people of India are also moving towards development at a fast pace with the determination of "Viksit Bharat 2047" on the track of heritage and development."

'If I say in the language of America, developed India means Make India Great Again, i.e. "MIGA". When the United States and India work together, i.e. "MAGA" plus "MIGA", the "MEGA" Partnership for prosperity is formed. And this mega spirit gives new scale and scope to our goals," Modi added in February.

What will happen with MAGA and MIGA will be keenly watched!