With just a week remaining before the Trump administration’s retaliatory tariffs take effect, the United States has classified India alongside China as a “state actor” enabling the supply of precursor chemicals and equipment used by drug traffickers, particularly in the illicit fentanyl trade.
U.S. Threat Assessment Flags India’s Role in Fentanyl Crisis
The 2025 Annual Threat Assessment (ATA)—a report outlining global risks to U.S. national security—was released on Tuesday and highlighted the increasing role of China and India in supplying materials fueling the ongoing fentanyl crisis in the United States.
According to the report, fentanyl and synthetic opioids remain the deadliest drugs trafficked into the U.S., causing over 52,000 deaths in the 12-month period ending October 2024. The Trump administration has escalated its crackdown on fentanyl trafficking, linking trade policies with countries suspected of involvement in the illicit drug supply chain. However, this is the first time Washington has explicitly placed India on the same level as China regarding the supply of precursor chemicals used in manufacturing fentanyl.
The report underscores that while Mexican drug cartels, particularly the Sinaloa Cartel and the Jalisco New Generation Cartel, continue to dominate fentanyl production and distribution, they rely on precursor chemicals and equipment sourced from state actors like China and India.
“Non-state groups are often enabled, both directly and indirectly, by state actors, such as China and India as sources of precursors and equipment for drug traffickers,” the report states.
“China remains the primary source country for illicit fentanyl precursor chemicals and pill-pressing equipment, followed by India,” according to the assessment published by the office of Tulsi Gabbard, U.S. Director of National Intelligence (DNI).
Recent Criminal Cases Involving India-Based Companies
The report’s findings follow a recent federal case in Washington, D.C., where an India-based chemical manufacturing company and three of its executives were charged with illegally importing fentanyl precursors. In another case, two senior employees of a Hyderabad-based company were arrested in New York City last week, further intensifying concerns about India’s role in the illicit fentanyl supply chain.
Broader Security Concerns: Terrorism and Transnational Threats
Beyond the drug trade, the ATA report also raised alarms about transnational terrorist threats. It identified ISIS-Khorasan (ISIS-K) as among the most aggressive branches of ISIS, warning that the group, along with “entrepreneurial plotters,” may attempt to attack the U.S. or its allies using online propaganda and recruitment efforts.
Additionally, the report noted that Tehrik-e-Taliban Pakistan (TTP) has focused recent attacks on Pakistan, likely to avoid additional counter-terrorism scrutiny. However, the group’s historical ties to al-Qaida and past involvement in U.S.-targeted operations remain a concern.
“Anti-India groups, including Lashkar-e-Tayyiba, similarly concern us in part because of their historical links with al-Qaida,” the report observed.
Trade Tensions: India in Talks to Avoid U.S. Tariffs
Amid these escalating tensions, Trump has threatened to impose new reciprocal tariffs on several countries, including India, as part of his “Liberation Day” tariffs set to take effect on April 2. However, India is currently negotiating a free trade agreement (FTA) with the U.S., which could potentially exempt it from some of these trade restrictions.
The developments mark a critical juncture in U.S.-India relations, as the designations in the fentanyl trade could strain diplomatic ties while both nations seek to navigate trade disputes and secure economic agreements.