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Delhi News Daily > Blog > Business > Trump’s “shock and awe” tariff tactics won’t break Indian resolve: Santosh Rao – Delhi News Daily
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Trump’s “shock and awe” tariff tactics won’t break Indian resolve: Santosh Rao – Delhi News Daily

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Last updated: August 5, 2025 6:16 am
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“Right now, both sides are pretty entrenched. I expect more negotiations. There’s an American delegation coming to India later this month, so discussions are ongoing at the official level. But at some point, perhaps Modi and Trump need to meet—we haven’t yet seen executive-level engagement. Maybe that could help cool things down,” says Santosh Rao, Manhattan Venture Partners.

The situation seems to be taking an ugly U-turn. From accusing India of having a dead economy, we are now seeing Donald Trump saying he could substantially raise tariffs on India. Do you expect the situation and the dust to settle in the near term, or is it likely to continue for at least the next few days?
Santosh Rao: Tempers need to cool. At this point, things are not very favorable. President Trump is unpredictable—he has a habit of doing the “shock and awe” routine, but sometimes he backs off. In this case, however, there’s a narrative building that India has been the bad guy—profiting from cheap Russian oil, selling it to Europe, and making money from it. So, the perception is that India is playing the rogue actor in this whole situation.

Right now, both sides are pretty entrenched. I expect more negotiations. There’s an American delegation coming to India later this month, so discussions are ongoing at the official level. But at some point, perhaps Modi and Trump need to meet—we haven’t yet seen executive-level engagement. Maybe that could help cool things down.

But this talk of a 100% tariff, or whatever he decides to impose, is not good for the economy. Still, I don’t think India will just give in and accept whatever is thrown at it. There’s going to be a lot of back-and-forth. It’s unlikely to be resolved in the near term. We haven’t heard the last of this—it’s going to go on for a few more weeks, if not months.

Like you said, India is unlikely to give in. August 7th is the day when tariffs are expected to take effect. What are your expectations, given that negotiations are likely to continue—and as you mentioned, they need to escalate to the top leadership level, with perhaps Trump and Modi engaging directly to reach a trade deal?
Santosh Rao: Yes, the tariffs are expected to take effect on August 7th. India has responded with 25% tariffs on a reciprocal basis. On average, the reciprocal tariffs being implemented by the U.S. come to around 15%, up from the 3% that existed globally. So that’s a big jump, and the market has largely absorbed it.

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What we don’t know yet is whether Trump will immediately add the 100% on top of that, or if that will happen gradually. I haven’t seen any formal language indicating that tariffs will go from 25% to 100% right away, but we still have a few days to go. He might still escalate it.Just a few hours ago, he posted that he intends to “slam” India with 100% tariffs because, according to him, India isn’t listening and is being stubborn. So, we’ll have to wait and see. He’s a tough negotiator—applies pressure, pushes people to the edge, presses every button, and then sometimes backs off a bit. That’s been his style, and it has brought people to the negotiating table—even the European Union has struck a deal.At some point, he’s expecting India to do the same. But it’s not going to be straightforward. India has a strong domestic constituency to answer to, and its demands in trade negotiations are legitimate, based on the details I’ve seen.

So yes, more discussions are needed, tempers need to cool, and eventually, one-on-one talks will happen—it’s in the best interest of both countries.



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