Trump imposes 25% tariffs and additional penalty on India

India will face a 25 per cent tariff on goods exported to the United States starting August 1, as announced by US President Donald Trump on Truth Social, his social media platform, on Wednesday. 

In addition to the tariff, Trump imposed an unspecified penalty on India, which he referred to as America's "friend," for purchasing the "vast majority of their military equipment" and oil from Russia. The announcement aligns with a deadline Trump set for reciprocal tariffs on multiple countries, including India. In April, higher levies were proposed but later reduced and paused to facilitate negotiations.

In a brief but assertive post, Trump described India’s tariffs as "far too high, among the highest in the world" and criticized their "strenuous and obnoxious non-monetary trade barriers." He further accused India, alongside China, of indirectly supporting Russia’s ongoing war in Ukraine—now in its third year—through energy and military purchases. Trump, who has claimed he could end the conflict within 24 hours of his January 20 inauguration, stated:

"While India is our friend... we have done relatively little business with them because their tariffs are far too high, among the highest in the world. They also have the most strenuous and obnoxious non-monetary trade barriers of any country. Additionally, they have always bought a vast majority of their military equipment from Russia and are Russia’s largest buyer of energy... at a time when everyone wants Russia to stop the killing in Ukraine. India will, therefore, be paying a tariff of 25 per cent, plus a penalty for the above, starting August 1."

Speaking to reporters after returning from a golf holiday in Scotland, Trump reiterated, "India has been a good friend... but has charged basically more tariffs than almost any other country... you can’t do that."

The tariffs come as India and the US attempt to finalize a trade deal. US Trade Representative Jamieson Greer indicated on Monday that the Trump administration requires additional time to assess India’s willingness to open its markets to American exports, particularly in the dairy and agriculture sectors. These sectors are sensitive in India due to the potential impact of cheaper American products on local farmers.

Sources told NDTV last week that both nations are nearing a "mini deal" by September or October, aiming to avoid heavy tariffs on key Indian exports like steel, automotive parts, and aluminium. Last month, Trump referenced a recent US-Indonesia agreement that reduced tariffs to 19 per cent, expressing optimism about a future trade deal with India, stating, "We’re going to have access to India... Our people couldn’t go in. We’re getting access now because of the tariffs."

Sources also clarified that the US has not imposed specific conditions on India for a deal. In the April-June quarter of this fiscal year, India’s merchandise exports to the US surged by 22.8 per cent to $25.51 billion, while imports grew by 11.68 per cent to $12.86 billion.