For Indian exporters, the impact would likely be reduced demand from the US market, specifically for textiles, pharmaceuticals, engineering goods, and IT services.
Published Jul 30, 2025 | 8:03 PM ⚊ Updated Jul 30, 2025 | 8:09 PM
Donald J Trump
Synopsis: US President Donald Trump on Wednesday announced a 25 percent tariff and an additional penalty on Indian imports, citing India’s high trade barriers and ties with Russia. The tariff, set to take effect from 1 August, is the second such duty imposed by the Trump administrations since returning to officer earlier this year.
United States President Donald J Trump has announced a 25 percent tariff on Indian imports, accusing New Delhi of maintaining “among the highest [tariffs] in the World” and “the most strenuous and obnoxious” trade barriers.
He also announced an additional “penalty” over India’s continued close ties with Russia, despite a Western boycott following the war in Ukraine.
“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,” Trump wrote in a post on his social media platform, TruthSocial, on the evening of Wednesday, 30 July.
The tariff will come into effect from 1 August. Trump further criticised India for its reliance on Russia:
“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! INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST. THANK YOU FOR YOUR ATTENTION TO THIS MATTER. MAGA!”
Since the start of Russia’s invasion of Ukraine in 2022, as most European and NATO-aligned countries sanctioned Russia, India has become the top buyer of heavily discounted Russian oil.
Between January and July this year, India’s oil imports from Russia rose marginally, with refiners Reliance Industries Ltd and Nayara Energy accounting for almost half of the overall purchases, according to Reuters.
Since taking office in January 2025 for a second term, President Trump has pursued an aggressive and often unpredictable trade policy. On 2 April, he declared “Liberation Day” and imposed sweeping tariffs on nearly all US trading partners.
This included a universal 10 percent tariff on all imports starting 5 April, and additional “reciprocal” tariffs from 9 April targeting countries with large trade surpluses with the US. India was among those specifically targeted, along with China, Canada, and Mexico.
Tariffs are taxes on imported goods, typically paid at customs by the importer. While the Trump administration has been presenting tariffs as penalties on countries exporting to the United States, the financial burden is borne by American companies and is almost always passed on to the end consumer in the form of higher prices.
For Indian exporters, the impact would likely be reduced demand from the US market, specifically for textiles, pharmaceuticals, engineering goods, and IT services.
This is the second time Trump has threatened tariffs on India this year. Similar duties of up to 27 percent were announced in April as part of a broad tariff policy covering almost every country in the world – including some uninhabited islands – but were later paused.
The United States currently runs a 45.7 billion dollar trade deficit with India. Hours before the announcement, Trump had threatened such a move unless India agreed to a favourable trade deal.
“We’re going to see. India has been a good friend, but India has charged basically more tariffs than almost any other country,” he said, according to the BBC.
“But now I’m in charge, and you just can’t do that.”
The Union government has yet to respond to Trump’s announcement.
(Edited by Dese Gowda)
