From 'great friend' to 'tariff king': The changing shades of the U.S.-India relationship

In February, U.S. President Donald Trump and Indian Prime Minister Narendra Modi exchanged lukewarm greetings and bear hugs, and pledged to prosecute an early commercialized agreement.

Now, six months on, that goodwill has soured. Trump labels India the "tariff king," threatens higher levies wrong 24 hours, and accuses it of fueling Russia's warfare successful Ukraine done lipid purchases.

That displacement raises questions: Will India output to U.S. pressure, oregon propulsion backmost and hazard straining a two-decade partnership?

Former Singapore diplomat Bilahari Kausikan told CNBC that India volition ever prioritize its nationalist interests. "India is [a] state with a heavy consciousness of aforesaid arsenic an autarkic actor," helium said, adding it volition "never play lawman to immoderate sheriff."

On Wednesday, Trump vowed to "substantially" rise tariffs connected Indian exports, pursuing a 25% hike and threats of penalties implicit Russian lipid and arms purchases.

But Kausikan, who was besides erstwhile imperishable caput of Singapore's overseas service, said it's "absurd to deliberation that conscionable due to the fact that New Delhi is shocked astatine Trump's tariffs, his insulting characterization of the Indian system arsenic 'dead' and his flirtation with Pakistan, India volition plaything to China oregon Russia astatine U.S. expense."

He was referring to Trump's post connected societal media, which called the economies of some India and Russia "dead."

India leaned toward the Soviet Union during the Cold War, but aft the USSR's collapse, India deepened relations with the U.S., particularly nether Presidents George W. Bush and Barack Obama.

"What brought India and the U.S. unneurotic was a shared interest implicit China," Kausikan noted. "That interest isn't going away."

Today, the 2 nations had elevated their concern to a "Comprehensive and Global Strategic Partnership" with practice successful defense, technology, and cleanable energy. India was designated a "major defence partner" by the U.S. successful 2016.

However, Evan Feigenbaum, Vice President of studies the Carnegie Endowment for International Peace warned successful a commentary Monday that Trump's actions could unravel much than 2 decades of progress.

Speaking connected CNBC's "Squawk Box Asia," helium said though determination were points of disagreement successful their bilateral narration — specified arsenic India's ties with Russia and the United States' ties with Pakistan — "they ne'er fto those 3rd enactment relationships oregon concerns bleed backmost into the bilateral narration successful ways that were precise debilitating."

"All bets are disconnected now," helium added.

India's External Affairs Ministry responded sharply to disapproval implicit Russian lipid purchases Tuesday, calling it "unjustified and unreasonable." The ministry besides pointed retired that Western nations criticizing India are themselves continuing to commercialized with Russia.

Feigenbaum said India sees that arsenic "hypocritical" and "blame shifting," saying that the West's corporate nonaccomplishment to halt the warfare is present being pinned connected India. He besides noted increasing unease from New Delhi implicit the United States' outreach to China.

Former U.S. ambassador to the U.N. Nikki Haley urged the medication not to "burn a narration with a beardown state similar India," highlighting that China, which is Russia's apical lipid buyer, received a 90-day tariff intermission successful May.

Prospects for a commercialized woody look slim. Feigenbaum said Indian media, the public, and the absorption are urging the authorities not to amusement weakness. "Even if there's a deal, the spot is gone," helium said.

Former Indian Finance Secretary Subhash Garg echoed that sentiment connected CNBC's "Inside India" Tuesday: "Our positions are truthful antithetic that determination is precise small anticipation of a reconciliation."

He suggested India should sorb the export deed and diversify to home oregon alternate markets. "If determination is an American demand, they volition bargain and fto [the] American consumers and the importers wage the tariff. Let them carnivore that."

However, erstwhile Indian Labor Secretary Sumita Dawra expressed cautious optimism to CNBC connected Wednesday. She said India hopes for "positive outcomes" from commercialized talks aboriginal successful August.

She said portion tariffs whitethorn person an interaction connected exports, India's home request is "very high," and pointed astatine different commercialized agreements that the state has been making, specified arsenic the India-U.K. escaped commercialized statement and the India-EU FTA, negotiations of which are expected to reason aboriginal this year.

"We're looking for a fair, mutually beneficial deal," Dawra said. "I'm definite our negotiators volition bash a large job."