US President Donald Trump struck a mixed tone on Tuesday, lauding his "very good" relationship with Indian Prime Minister Narendra Modi while issuing fresh warnings over steep 50% tariffs hammering Indian exports. Speaking at a House GOP retreat, Trump acknowledged the strain, saying Modi "is not that happy with me" due to the duties tied to India's heavy purchases of discounted Russian oil amid the Ukraine war.

The penalties kicked in last year, blending a baseline 25% reciprocal tariff with an extra 25% for buying Moscow's cheap crude—a move that's saved India billions but irked Washington. Key sectors like apparel, gems, and seafood face the brunt, though Trump noted India has "reduced it very substantially," citing examples like Reliance Industries halting Russian shipments this month. This pressure tactic echoes Trump's broader "America First" playbook, aiming to curb indirect funding for Russia's war machine.

Modi has countered by promising tax relief for exporters and doubling down on "Make in India" to blunt the impact, even as US-India defense deals—like accelerated Apache helicopter deliveries—forge ahead. Remarkably, some exports bucked the trend, rising over 20% late last year, with niche products like fox nuts pivoting to new global buyers. Trump blended the tough talk with compliments, calling Modi a "very good man" eager to "make me happy," hinting at room for negotiation.

As the Quad partnership holds firm, analysts eye India's oil diversification—already down sharply from Russia—as a potential truce path, possibly paving way for a mini trade deal. This tariff tango tests the limits of "friendly" rivalry, but with Trump back in the White House since January 2025, expect more high-stakes deal-making to keep both economies intertwined.