(Replace) August 7, 2025, 3:54 AM GMT+1: Article up to date.
US President Donald Trump doubled tariffs on Indian items to 50% as a penalty for its purchases of Russian oil, escalating a battle with a key Asian associate and sparking outrage in New Delhi.
Trump signed an govt order imposing a 25% tariff on Indian imports that can stack on prime of the 25% levy he introduced final week, the White Home stated Wednesday. The upper obligation will take impact inside 21 days, in line with the order, offering a while for negotiation.
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Prime Minister Narendra Modi’s authorities fired again after the announcement, saying the purchases are essential for the nation’s vitality safety and blasting Trump for singling out India when different international locations are additionally shopping for Russian oil. The nation’s opposition chief, Rahul Gandhi, additionally lambasted Trump as a “bully.”
“We reiterate that these actions are unfair, unjustified and unreasonable,” a spokesperson for the Ministry of Exterior Affairs stated in a assertion. “India will take all actions essential to guard its nationwide pursuits.”
Trump has given Russian President Vladimir Putin an Aug. 8 deadline to achieve a ceasefire with Ukraine or face sanctions, and threatened Moscow’s key buying and selling companions like India in a bid to safe leverage. Whereas talks between US and Russian officers on Wednesday didn’t present a right away breakthrough, Trump stated afterward there was a “excellent probability” he would meet with Putin and Ukrainian President Volodymyr Zelenskiy quickly in one other bid to dealer peace.
Buyers largely took the information in stride. Oil inched greater after a five-day drop — the longest dropping run since Might — whereas the iShares MSCI India ETF closed 0.3% decrease in US buying and selling Wednesday. One-month forwards on dollar-rupee held regular at round 87.9 within the offshore market.
Though a deal remains to be attainable to keep away from the upper charge, Trump’s current barrage towards India has rapidly broken ties with a nation that successive administrations have sought to court docket as a counterweight to China. He’s referred to as India’s economic system “lifeless,” its tariff boundaries “obnoxious” and its individuals detached to the plight of Ukrainians — including to tensions after Trump angered India by claiming to have brokered peace with Pakistan earlier this yr.
If carried out, the upper charges could be an additional hit to India’s economic system. Bloomberg Economics estimated {that a} 50% tariff could reduce US-bound exports by 60%, placing 0.9% of gross home product in danger. It might notably hit labor-intensive industries equivalent to gems and jewellery, textiles, footwear, carpets and agricultural items.
‘Leverage, Not Coverage’
“The transfer seems much less about pressuring Moscow and extra about forcing Delhi’s hand in stalled commerce talks,” Chetna Kumar and Adam Farrar of Bloomberg Economics stated in a report. “Notably, Trump hasn’t imposed related penalties on different main patrons of Russian crude — together with China — or on Russia itself, and has delayed implementation by three weeks, signaling that is leverage, not coverage.”
Trump unilaterally imposed a 25% “reciprocal” cost on Indian items set to take impact Thursday following months of negotiations with New Delhi. He accused Modi’s authorities of refusing to ease market entry for American items and criticized its membership within the BRICS group of growing economies. India has been reluctant to import extra agricultural merchandise, specifically, so as to defend its farming and dairy industries.
Whereas India remains to be open to talks, Trump’s tariff threats are eroding goodwill and danger prompting Modi to shift nearer to Russia and China. He’s planning to go to China later this month for the primary time in additional than seven years, Reuters reported Wednesday, a visit that had been flagged earlier this yr in high-level visits by key cupboard members to Beijing previous to the deterioration in ties with the US.
Though Modi has shunned mentioning Trump by title, he has struck a defiant tone within the wake of the tariff threats, warning that the worldwide scenario is risky and urging the nation to purchase native items. The US president’s transfer to impose a 50% tariff sparked a uncommon second of unity throughout India’s political spectrum.
“Trump’s 50% tariff is financial blackmail — an try and bully India into an unfair commerce deal,” Gandhi, chief of the opposition Congress get together and Modi’s most important rival, stated in a submit on X. “PM Modi higher not let his weak point override the pursuits of the Indian individuals.”
Trump’s 50% tariff is financial blackmail – an try and bully India into an unfair commerce deal.
PM Modi higher not let his weak point override the pursuits of the Indian individuals.
— Rahul Gandhi (@RahulGandhi) August 6, 2025
Shashi Tharoor, one other opposition lawmaker, urged Modi’s authorities to have a look at various buying and selling companions and stated he expects strain inside India now to impose reciprocal tariffs on American shipments to the South Asian nation.
Trump’s risk to impose tariffs on the pharmaceutical sector may additionally deal a significant blow to India, because the trade ranks among the many nation’s prime three exports to the US. The Asian nation exported over $10.5 billion price of prescribed drugs in 2024–25, in line with Indian Commerce Ministry information. Duties on medication would go away over 40% of India’s exports to the US adversely affected, including to current levies on metal, aluminum, and autos.
Ajay Sahai, director basic of the Federation of Indian Export Organisations, stated Trump’s strikes are a “extreme setback” for Indian firms as orders have already got been on maintain. “This extra blow may power exporters to lose long-standing shoppers,” he stated.
Trump has additionally turned to tariffs as a device to attempt to power the tip of Putin’s invasion of Ukraine, now in its fourth yr. The president boasted throughout his 2024 marketing campaign he may finish the battle on his first day in workplace, however he has more and more vented frustration as efforts to dealer a truce have made little progress.
Ukraine’s allies have stated vitality purchases by India, China and different nations have propped up Putin’s economic system and undercut strain on Moscow to finish the battle.
Requested Wednesday about why he’s not placing tariffs on China over its purchases of Russian oil, Trump stated it “may occur.” Nonetheless, White Home adviser Peter Navarro downplayed that chance in a separate look with reporters.
“We’ve got over 50% tariffs on China,” Navarro stated. “We don’t need to get to a degree the place we harm ourselves.”
