Trump Orders 25% Tariff on Indian Goods Citing High Barriers, Russia Ties

The United States will impose a sweeping 25% tariff on all Indian exports starting August 1, after President Donald Trump announced the measure on his social media platform, Truth Social.

In his latest comments, Trump cited India’s high tariffs, “strenuous non-monetary trade barriers,” and billions in purchases of Russian energy and military equipment as justification for the move.

Trump insisted that the new tariff, accompanied by an additional unspecified penalty, was a necessary response to what he called one of the world’s most protected markets.

“India is our friend, but we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world,” he posted, echoing long-held complaints from US trade officials.

Tariffs Arrive as Trade Talks Founder

The announcement takes effect after a temporary pause in April allowed for further talks. Negotiations have stumbled over US demands for greater access to India’s protected dairy and agriculture sectors, areas considered particularly sensitive by Indian leaders worried about the impact on small farmers.

US Trade Representative Jamieson Greer said more time was needed to sound out India’s willingness to lower barriers for American goods. Without a breakthrough, the new tariff regime lands as both sides scramble to reach what officials call a “mini deal” to avert even broader trade pain.

Indian diplomats say that agreement remains possible by September or October, possibly shielding key exports like steel and automotive parts from the harshest penalties.

Did you know?
India’s average applied tariff rate was 17.6% in 2024, higher than nearly all other G20 economies according to the World Bank. Many US goods face duties above 30% entering India, even before the new US tariff.

Russia Ties Trigger Additional Penalties

Trump also pointed directly to India’s longstanding defense and energy ties with Russia, now in the third year of its invasion of Ukraine. “They have always bought a vast majority of their military equipment from Russia and are Russia's largest buyer of energy, along with China,” he argued.

The administration is using that rationale to justify further penalty measures, though the specifics remain undisclosed as of Wednesday evening.

The penalties come against a backdrop of continued strong bilateral trade. Indian exports to the US surged nearly 23% in the latest quarter, while US imports to India grew nearly 12%. Still, the US maintains a $45.7 billion trade deficit with India, according to 2024 data.

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Diplomatic Stakes and Economic Uncertainty Rise

Even as Trump referred to India as “our friend,” he warned that the US cannot accept what it sees as persistent trade obstruction. Indian officials, meanwhile, are weighing next steps, with some hoping US electoral or diplomatic dynamics might prompt a softening of the new regime.

For now, many sectors, including textiles, autos, and metals, stand to feel a significant hit from August 1 onward. Businesses and workers in both countries await clarity, hoping that ongoing talks can still yield a compromise before the full force of tariffs upends years of surging US-India trade.