US President Donald Trump imposed fresh tariffs on India, citing an unfair trade imbalance and India’s continued oil imports from Russia. Just hours later, he unveiled a deal with Pakistan to jointly develop its untapped oil reserves. The move came against the backdrop of India’s membership in BRICS, which Trump criticized as “anti-United States.”
Expectations
The deal represents a rare moment of optimism in US-Pakistan relations, traditionally marked by security concerns. For Pakistan, it signals a potential boost to its energy sector and economy. For the US, it strengthens strategic foothold in Asia, offering a counter to China’s growing influence in the region.
Objectives of the Deal
The primary aim is to develop Pakistan’s oil reserves with American support and potentially allow future exports to India. This aligns with Washington’s larger strategy of energy cooperation and trade recalibration, while also seeking to reduce the US trade deficit.
Key Features
- 25% tariff on Indian imports, effective from August 1, 2025.
- US-Pakistan agreement to explore and develop “massive oil reserves”.
- Potential for Pakistan to export oil to India in the future.
- Deal follows earlier meetings between Pakistan’s Foreign Minister Ishaq Dar and US officials.
- Trump linked the tariff decision partly to India’s role in BRICS.
Impact for India
For India, the tariffs will increase import costs, straining trade relations with the US. For Pakistan, the deal could open new economic avenues and strengthen ties with Washington. The US gains a strategic ally in South Asia, positioning itself against BRICS and China’s Belt and Road Initiative. Regionally, this move may affect the fragile India-Pakistan ceasefire brokered earlier in 2025.
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