US President Donald Trump has enacted an executive order imposing an extra 25% tariff on India due to its purchase of Russian oil. This increases the total tariff on Indian imports to the US to 50%, marking one of the highest rates set by the US. The new tariff will be effective from August 27, as per the executive order.
India’s foreign ministry responded, stating that Delhi’s position on Russian imports is clear and labeled the tariff as “unfair, unjustified, and unreasonable.” Their statement expressed regret over the US decision, highlighting that other nations make similar moves in their national interest. India assured that it would protect its national interests.
Earlier, Trump warned of higher tariffs, criticizing India’s disregard for the impact of the Russian war on Ukraine. The White House emphasized that Russia’s actions pose a threat to US national security, requiring stronger countermeasures. It criticized India’s Russian oil imports as undermining US efforts in Ukraine and indicated that the US would assess other Russian oil-importing nations to possibly recommend further actions.
Russia’s main exports are oil and gas, primarily to China, India, and Turkey. Trump’s additional tariffs, which would result in a hefty 50% duty on key Indian exports such as textiles, jewelry, auto parts, and seafood, follow talks in Moscow by US envoy Steve Witkoff to broker Russia-Ukraine peace. Electronics and pharmaceuticals remain exempt for now.
India has previously deemed Trump’s tariff threats over Russian oil as “unjustified and unreasonable.” An Indian foreign ministry spokesperson mentioned prior US encouragement to import Russian gas for energy market stability. He noted that India turned to Russian imports as traditional supplies were redirected to Europe post-conflict outbreak.
This tariff threat shows Trump’s readiness to impose sanctions due to the Ukraine war, even against allies or trading partners. It signals a warning to other countries about potential future sanctions or tariffs. Hence, it’s not Trump’s first instance of using secondary tariffs, previously applied to Venezuelan oil buyers.
India has criticized the US, its largest trading partner, for such levies while maintaining its own trade with Russia. Last year, US-Russia trade reached an estimated $3.5bn despite sanctions and tariffs. Trump and Indian PM Narendra Modi have celebrated their bilateral ties but tariffs indicate diverging interests between the nations.
The Federation of India Exports Organisations condemned the tariff hike as “extremely shocking,” affecting 55% of Indian exports to the US. According to the Global Trade Research Initiative (GTRI), the tariffs could significantly increase Indian goods’ US prices, potentially reducing US-bound exports by 40-50%. Ajay Srivastava, former Indian trade official and GTRI head, advised India to remain calm, avoid retaliation, and understand that genuine trade talks cannot thrive under threat or mistrust.