American President Donald Trump announced the imposition of a 25% tariff on goods imported from India to the U.S. in April 2025, with an additional 25% tariff starting from August 27, 2025. As a result, Indian exports now face a total tariff of 50%.
SNPNEWS.IN Update 27 August 2025: In April 2025, Trump imposed a 25% “reciprocal tariff” on India to address the U.S. trade deficit, which has been in effect since August 7, 2025. On July 30, 2025, Trump posted on Truth Social, stating that India is “Russia’s largest energy buyer and is not pressuring Russia to stop the killings in Ukraine.” He threatened to “punish” India for supporting Russia. In an interview on August 5, 2025, Trump remarked, “India is buying Russian oil and fueling the war machine. I will significantly increase tariffs on India.”
On August 6, 2025, Trump issued an Executive Order labeling India as a country “directly or indirectly importing Russian oil” and imposed an additional 25% tariff, bringing the total to 50%. The order cites a “national emergency” linked to the Ukraine war. Trump stated, “India is busy profiting from Russian oil and doesn’t care about the killings in Ukraine.” This additional 25% tariff will take effect from Wednesday, August 27, 2025.
India has called the tariffs “unjust and unwarranted” and linked its Russian oil purchases to energy security. Prime Minister Narendra Modi has stated that India will not allow the interests of farmers and the dairy/meat sectors to be undermined under U.S. pressure.
On August 26, 2025, the PMO held a meeting with the Finance and Commerce Ministers, discussing a support package for exporters (financial subsidies, loan guarantees) and exploring new markets like Europe and Australia. Apart from a relief package for exporters (₹25,000 crore), strengthening the domestic market, and increasing trade with Russia, India has warned of retaliatory tariffs against the U.S., though no such action has been taken yet.
India is working to finalize a Bilateral Trade Agreement (BTA) with the U.S. by the end of 2025, but challenges remain in the agriculture and dairy sectors. A U.S. team may visit India next week.
■ India’s trade with the U.S. is approximately $190 billion, with $86.5 billion in exports. These tariffs could reduce Indian exports by 40-50%, potentially slowing economic growth by up to 6%.
● Textiles and Garments: India exports $10 billion annually to the U.S. Post-tariff, this sector could see a 70% job loss risk.
● Gems and Jewelry: Annual exports of $8 billion may be severely impacted.
● Leather and Auto Parts: India exports $5 billion annually, and MSMEs could face significant losses.
● Chemicals and Metals: India’s $12 billion annual exports may decline, directly benefiting China and Vietnam.
● Exempted Sectors: Pharmaceuticals, semiconductors, and energy, which account for 45% of India’s exports, are excluded from the tariff war.
● Estimated Loss: Analysts predict an annual loss of $7 billion for India, equivalent to 2.5% of its GDP, leading to a weaker rupee and reduced stock market confidence.
Trump has stated that if Russia does not make peace with Ukraine, other countries like China could face 100% tariffs. However, India has been specifically targeted, while China, a major U.S. trade partner, has been spared due to its critical role in various sectors.
■ U.S. Administration’s Reaction to India:-
● Scott Bessent (Treasury Secretary): On August 19, 2025, in a CNBC interview, he said, “India buys Russian oil at low prices and sells refined products to Europe and the U.S. This ‘arbitrage’ has earned India an extra $16 billion, which is unacceptable.”
● Stephen Miller (Deputy Chief of Staff): On August 12, 2025, stated, “India’s purchase of Russian oil is unacceptable.”
● Peter Navarro (White House Trade Advisor): On August 11, 2025, called India a funder of Russia’s war.
● JD Vance (Vice President): On August 12, 2025, said, “Relations with China are complex, but targeting India is necessary.”
The U.S. claims this reaction is to end the Ukraine war, with Trump increasing pressure on Russia for a “peace deal.” However, analysts suggest it is also a strategy to gain leverage in trade negotiations with India, such as securing concessions for U.S. companies in agriculture and dairy and reducing or eliminating subsidies.