Modi backs his Russian ties, regardless of what Trump thinks

Narendra Modi isn’t backing down from his Russia ties, no matter how loud Donald Trump shouts about it. On Friday, the Indian prime minister said he had a “very good and detailed conversation” with Vladimir Putin and confirmed the Russian leader would visit India later this year.

Modi wrote on X that he thanked Putin for sharing the “latest developments on Ukraine,” reviewed progress in their bilateral agenda, and reaffirmed the so-called “Special and Privileged Strategic Partnership.” Then came the line that’s guaranteed to irritate Washington: “I look forward to hosting President Putin in India later this year.”

The message came just days after Trump hit India with a tariff hike big enough to sting. On Wednesday, the U.S. president slapped an extra 25% duty on Indian goods, taking the total to 50%, far higher than tariffs on other Asia-Pacific nations. His reason? New Delhi’s continued purchases of Russian oil, something Trump says he’s repeatedly warned about.

Trump doubles tariffs and fires back over Russia

Days before the tariff hike, Trump said:

“I don’t care what India does with Russia. They can take their de*d economies down together, for all I care. We have done very little business with India – their tariffs are too high, among the highest in the world. Likewise, Russia and the USA do almost no business together.”

The numbers aren’t small. A 50% duty means India now faces one of the steepest tariff walls in its trade with the U.S., and analysts say it will hurt.

Moody’s Ratings warned Friday that India’s real GDP growth could drop by about 0.3 percentage points from its current 6.3% forecast for the fiscal year ending March 2026.

The ratings agency said the wide tariff gap with other Asia-Pacific countries will likely slow India’s manufacturing plans, especially for high-value sectors like electronics.

Moody’s also pointed out that cutting Russian oil imports to dodge the penalties could leave India scrambling for enough crude elsewhere. Higher costs would push up the import bill, widen the current account deficit, and make the country less competitive for global investment.

Trump pushes deadline on Ukraine while eyeing harsher penalties

The tariff fight is only part of Trump’s pressure campaign. Frustrated with Moscow, he’s now threatening “secondary tariffs” of about 100% on Russia’s trade partners if the war in Ukraine doesn’t end soon.

His original 50-day timeline to Putin was later shortened, and Bloomberg News reported Friday that U.S. and Russian officials are working toward a deal that could stop the fighting and let Russia keep the land it has already taken.

Trump has made ending the war a top foreign policy goal in his second term, after first trying to warm ties with Moscow. But talks have gone nowhere. Putin still demands that Ukraine abandon plans to join NATO and that Moscow hold on to four annexed Ukrainian regions. Russia has also called for new elections in Ukraine before a final peace deal.

Earlier this week, U.S. Special Envoy Steve Witkoff met Putin in what Trump called a “highly productive” discussion. “Everyone agrees this war must come to a close, and we will work towards that in the days and weeks to come,” Trump said Wednesday. By Thursday, his optimism had faded: “We’re going to see what he has to say. It’s going to be up to him. Very disappointed.”

Russia’s oil exports remain its main source of cash, even with G7 nations banning seaborne purchases. Non-G7 buyers can still use Western shipping and insurance if they stick to a price cap. Losing those buyers would deal another blow to an economy the World Bank says will grow just 1.4% this year, down from 4.3% in 2024.

Meanwhile, global trade tension is already making investors jumpy. Foreign portfolio investors have pulled $900 million from Indian equities so far in August, after $2 billion in outflows in July.

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