5 Key Takeaways
- The US has imposed both 25% tariffs and an additional 25% penalty, now referred to as 'sanctions', on Indian exports.
- The use of the term 'sanctions' revives painful memories in India of the punitive measures imposed after its 1998 nuclear tests.
- Formal US sanctions in 1998 led to severe restrictions on aid, military financing, and technology exports to India, taking nearly a decade to overcome.
- Current tensions have led to the postponement of US-India trade talks, with no immediate resolution in sight.
- Analysts warn that invoking 'sanctions' could further strain US-India relations, given the historical trauma associated with the term.
US Sanctions on India: Why It Feels Like Déjà Vu for Many Indians
Recently, tensions between India and the United States have reached a new high. The Trump administration has started using the word “sanctions” to describe the extra 25% penalty it’s adding on top of the existing 25% tariffs on Indian goods. In simple terms, this means that Indian products exported to the US will now face a whopping 50% tax. This move is part of President Trump’s strategy to pressure countries, including India, to help end the Russia-Ukraine war.
But why is the word “sanctions” causing such a stir in India? For many Indians, it brings back painful memories from over 30 years ago. Back in 1998, after India conducted nuclear tests, the US slapped formal sanctions on the country. These weren’t just higher taxes—they were much harsher. The US cut off foreign aid and military support, blocked loans from international banks, and banned the export of certain technologies to India. These measures hurt India’s economy and strained relations between the two countries for years.
It took almost a decade for things to get back to normal. The breakthrough came in 2008, when the US and India signed a civil nuclear deal, finally putting an end to decades of mistrust. Since then, the relationship between the two countries has improved, with growing trade and cooperation.
Now, with the Trump administration using the term “sanctions” again—even if it’s just about trade penalties—many in India are worried. Experts warn that this language can reopen old wounds and make diplomatic relations even more difficult. As Evan Feigenbaum, a former US State Department official, pointed out, American leaders need to understand why the word “sanctions” is so sensitive in India.
To make matters worse, the US has postponed upcoming trade talks with India, and there’s no clear end in sight for the Russia-Ukraine conflict. This means Indian exporters will have to deal with these high taxes for the foreseeable future, making it harder for them to compete in the US market.
In summary, while the current penalties aren’t as severe as the 1998 sanctions, the use of the term and the steep taxes are a big setback for US-India relations. For many Indians, it feels like history is repeating itself—and not in a good way.
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