In just one year, US President Donald Trump has upended the global order, using his historic return as arguably the world’s most powerful leader to treat friends, foes and allies alike to achieve desirable results. His most potent tool is tariffs, though he hasn’t shied away from political and military interventions either.
India, which enjoyed expanding trade, migration, and diplomatic relationships with the world’s largest economy over the past decade, saw one roadblock after another after Trump’s return.
The relationship also took an awkward turn over Trump’s claim that he mediated a ceasefire between India and Pakistan (one of the eight wars the US president claims he has ended), and when Washington imposed a 25% penalty for purchasing Russian oil. The country, in particular, faced troubles in two areas: trade and migration.
Export escape
India has been facing 50% US tariffs, which include an additional 25% tariff for purchasing Russian oil since 27 August. The steep tariffs put India at a significant disadvantage compared to other emerging-market peers, such as China (around 32%), Vietnam (20%), and Bangladesh (20%).
While steep tariffs were expected to be a huge blow for India, exports have shown resilience so far. In September-December, exports to the US saw only a marginal decline of 1% to $25.57 billion. Though the sectoral impact has been significant.
Many labour-intensive sectors recorded a sharp year-on-year fall in the September-November period, such as gems and jewellery (60%), plastic and linoleum (44.3%), glassware (44%) and fertilisers (33.3%), suggesting that the tariffs are biting smaller Indian exporters.
More broadly, however, efforts to diversify exports to alternative markets like China, Spain, Vietnam, and Hong Kong have yielded results, with overall exports actually rising 3% in September-December.
Oil toil
Since the Russia-Ukraine war, India has been purchasing Russian oil at discounted prices. Before the war, Russian oil constituted up to 2% of India’s total oil imports, which zoomed to 35% in FY25, making India the second largest consumer after China.
India’s role increased as Western countries—the EU and the US—tried to cripple Russia through sanctions. The US, under Trump, announced additional tariffs on India, but similar penalties were not imposed on China, Russia’s bigger oil consumer.
Considering that the US continues to be India’s trade partner, the country has begun curtailing Russian oil. The share of Russian oil has declined to 32% in FY26 so far. India’s rank also slipped to the third largest buyer of Russian oil from second in December.
At the same time, India’s imports of oil from the US have risen in an effort to ease trade tensions with the Trump administration. The US’ share in India’s oil imports has nearly doubled to 8.1% in FY26 from 4.6% last fiscal year.
Surge in deportations
Apart from tariffs, if there is one issue that has defined the India-US relationship under the Trump administration, it is immigration. Within hours of taking office in January last year, Trump signed an executive order fast-tracking deportations of illegal immigrants in the US.
The move had consequences for India as well. As over 200,000 unauthorized Indian immigrants were estimated to be residing in the US until 2022, several were deported quickly.
The deportation of over 200 illegal Indian immigrants in handcuffs and chains in February last year stirred controversy in India. As Trump cracked down on illegal immigrants, more Indians were deported throughout the year.
Data shared in Parliament by the external affairs ministry showed that 3,250 Indians were deported by the US until 28 November 2025. This far exceeded deportations in previous years, including those in Trump’s first year.
Visa pangs
A significant blow came to Indians when the Trump administration announced a crackdown on high-skilled immigration through tighter and costlier visa processes. The most seismic change was a steep one-time fee of $100,000 for new H-1B visa petitions, sharply raising the cost for employers to hire foreign workers.
The Trump administration is also close to approving a wage-based weighted lottery system for H-1B visas, which would prioritise applicants with higher salaries over the current random selection process. Indians, who receive the largest share of H-1B visas (around 74%), are the hardest hit as they face delays in visa processing and heightened uncertainty.
An analysis by the National Foundation for American Policy reveals that H-1B visa approvals for initial employment at the top 25 companies have declined by 19% year-over-year in FY25. Indian-based IT firms have been particularly hit. Overall, the top seven Indian companies had only 4,573 H-1B visas approved, representing a 37% year-on-year decline. Tata Consultancy Services (TCS) witnessed a decline of 41.7%.
Trump's second term has moved with full force on tariffs, immigration, and an aggressive assertion of America's power over the world. India has been particularly hit in matters related to trade and immigration, for which the country will have to keep finding alternative markets to reduce risks from overdependence on the US.
Nandita Venkatesan contributed to this story.