US President, Donald Trump has announced that he’ll impose a 25% tariff on goods from India, plus an additional import tax because of India’s purchasing of Russian oil.
Trump said on his Truth Social platform that India’s tariffs are “far too high” on US goods.
He added that India buys military equipment and oil from Russia, which he said has enabled the war in Ukraine.
As a result, he intends to charge an additional “penalty” starting on Friday, August 1, 2025, as part of the launch of his administration’s revised tariffs on multiple countries.
“Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country.
“Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD!”
Donald Trump
The announcement comes after a slew of negotiated trade frameworks with the European Union, Japan, the Philippines and Indonesia — all of which Trump said would open markets for American goods while enabling the US to raise tax rates on imports.
The US President views tariff revenues as a way to help offset the budget deficit increases tied to his recent income tax cuts and generate more domestic factory jobs.
While Trump has effectively wielded tariffs as a cudgel to reset the terms of trade, the economic impact is uncertain as most economists expect a slowdown in US growth and greater inflationary pressures as the costs of the taxes are passed along to domestic businesses and consumers.
The Census Bureau reported that the US ran a $45.8 trade imbalance in goods with India last year, meaning it imported more than it exported.
At a population exceeding 1.4 billion people, India is the world’s largest country and a possible geopolitical counterbalance to China.
India and Russia have close relations, and New Delhi has not supported Western sanctions on Moscow over its war in Ukraine. When Trump in February met with Indian Prime Minister, Narendra Modi, the US President said that India would start buying American oil and natural gas.
Trump’s plans to impose an additional “penalty” on India over its trade with Russia also comes as he has increased his rhetoric in recent weeks over President Vladimir Putin’s invasion of Ukraine.
In an escalation earlier this month, the US President threatened to implement secondary tariffs of 100% starting in early August on countries that buy Russian oil and gas, unless the Kremlin reaches a ceasefire deal with Ukraine.
China, India, Brazil and other major U.S. trade partners that rely on Russian energy would be hit particularly hard by a tariff like this.
Hopes Of Limited Trade Agreement Between US, India Dashed
Trump’s decision dashes hopes of a limited trade agreement between the two countries, which had been under negotiation for several months.
US and Indian trade negotiators had held multiple rounds of discussions to resolve contentious issues, particularly over market access for American agricultural and dairy products.
Despite progress in some areas, Indian officials resisted opening the domestic market to imports of wheat, corn, rice and genetically modified soybeans, citing risks to the livelihood of millions of Indian farmers.
The new tariffs are expected to impact India’s goods exports to the US, estimated at around $87 billion in 2024, including labour-intensive products such as garments, pharmaceuticals, gems and jeweler, and petrochemicals.
India now joins a growing list of countries facing higher tariffs under Trump’s “Liberation Day” trade policy, aimed at reshaping US trade relations by demanding greater reciprocity.
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