Washington DC / New Delhi, July 30: US President Donald Trump on Wednesday announced a 25 per cent tariff on imports from India starting August 1, alongside a penalty for New Delhi’s continued purchase of Russian oil and military equipment.
In a strongly worded post on his social media platform Truth Social, Trump said, “We have a massive trade deficit with India. …ALL THINGS NOT GOOD! INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST.”
Trump, however, added a diplomatic note, calling India a “friend” but reiterated longstanding US concerns over trade barriers. “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,” he said.
The decision marks a significant shift in the economic posture towards India, despite deepening diplomatic and strategic cooperation in recent years. Trump’s post appears to escalate tensions just as the two countries are working to finalise a long-pending trade deal.
Much of the US President’s ire was directed at India’s continued military and energy ties with Russia, despite Western efforts to isolate Moscow following its invasion of Ukraine.
“India has always bought a vast majority of 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,” Trump said, adding that such relationships were “no longer acceptable.”
Earlier in the day, External Affairs Minister S Jaishankar, speaking in the Rajya Sabha, confirmed that India is actively engaged in trade negotiations with Washington. “We are negotiating a trade agreement (with the US)… we have national interest at heart. We are negotiating an agreement that will serve our national interest,” he said.
Jaishankar did not comment directly on Trump’s latest threat but reiterated that India’s foreign policy and trade decisions are made in line with strategic autonomy and domestic priorities.
Trump had on Tuesday hinted at this move, warning that Indian exports could face tariffs ranging between 20 to 25 per cent if the trade deal remained stalled. Wednesday’s announcement confirms that the US intends to proceed with the punitive action, citing both economic and geopolitical grounds.
The US President has repeatedly criticized India’s tariff regime in the past, particularly during his first term in office. In 2019, he revoked India’s special trade status under the Generalized System of Preferences (GSP), citing “lack of equitable and reasonable access” to its markets.
Trade experts say the 25 per cent tariff could hit sectors such as pharmaceuticals, textiles, auto parts, and IT services — all key contributors to India’s export basket.
“This is a double blow — it mixes trade pressure with strategic coercion,” said an Indian trade negotiator familiar with the talks. “Tying Russia sanctions with bilateral tariffs is an unusual move, and it complicates the scope of the ongoing negotiations.”
Others warn that the penalty linked to India’s oil and arms purchases from Russia might set a precedent for future US actions, particularly if Trump wins a second term.
Meanwhile, opposition leaders in India criticised the Modi government’s handling of international relations. Congress MP Jairam Ramesh said, “The government’s blind support for Trump and photo-ops have now come home to roost. The real cost of weak diplomacy will be paid by Indian exporters and middle-class consumers.”
Despite the tariff announcement, both nations remain closely aligned on key strategic areas, including Indo-Pacific security, defence cooperation, and counter-terrorism. However, trade has remained the one stubborn thorn in the otherwise growing relationship.
India has consistently argued for policy space on its imports from Russia, citing defence preparedness and energy security, particularly as the Ukraine war continues to impact global oil prices.
While the Biden administration had taken a softer tone on India’s Russian ties, Trump’s latest move signals a shift back to pressure tactics. The 25 per cent tariff and penalty are likely to be challenged diplomatically and possibly even through World Trade Organization (WTO) channels, say officials.
In the short term, Indian exporters may face higher costs and delayed shipments. On the US side, some importers could also feel the pinch, especially those dependent on Indian raw materials and tech services.
Whether the two countries can salvage a compromise through accelerated negotiations remains to be seen.
For now, Trump’s message is loud and clear: trade friendship with America will come at a price — and geopolitics may drive that price higher than ever.
