Trump Imposes 25% Tariff, Penalty on India from August 1

Washington DC

US President Donald Trump on Wednesday announced a 25% tariff on Indian imports, along with an additional penalty, effective August 1. In a post on Truth Social, Trump accused India of imposing the “most strenuous and obnoxious non-monetary Trade Barriers” and criticized its continued purchases of Russian oil and military equipment.

“India has some of the highest tariffs in the world… They’ve also become Russia’s largest buyer of energy. All things not good,” Trump wrote. He added that the new tariff comes in response to India’s trade practices and geopolitical alignments, particularly amid ongoing international efforts to isolate Russia over the Ukraine war.

Trump’s announcement follows stalled trade negotiations between India and the US during their fifth round of talks last week in Washington. Although Trump hinted earlier that a tariff hike was likely, the scale of the move has drawn attention globally.

The new tariff, significantly higher than the 10% baseline rate on Indian exports, replaces a suspended 26% duty announced in April. Indian exporters, particularly in sectors like textiles, pharmaceuticals, and auto components, are expected to face heavy losses.

The penalty aligns with the proposed Russian Sanctions Act, 2025, currently under debate in the US Congress. The bill seeks to levy up to 500% duties on countries continuing to trade oil with Russia.

While the US has reached new trade agreements with several countries including the UK, Vietnam, and Japan, its relationship with India faces fresh uncertainty following this sharp policy turn.