Ramping up stress forward of the anticipated arrival in India of US commerce negotiators on August 25, President Donald Trump Wednesday doubled the tariffs on India to 50 per cent, however opened a 21-day window earlier than the extra tariff of 25 per cent kicks in.
A White Home assertion mentioned the US will impose “further 25 per cent advert valorem obligation” above the 25 per cent reciprocal tariffs introduced on August 1 to “cope with the nationwide emergency stemming from Russia’s actions in Ukraine”. This tariff is deemed vital and applicable because of India’s “direct or oblique import of Russian Federation oil”, which the President judges will extra successfully tackle the nationwide emergency, the chief order mentioned.
The extra tariff dramatically raises stress on India as most of its rivals corresponding to Vietnam, Bangladesh and now China are at decrease tariffs. Nonetheless, exporters mentioned that the US tariff-related uncertainty is already disrupting commerce. About half of India’s whole exports of $80 billion are, nonetheless, within the exemption listing that embrace merchandise corresponding to pharma and electronics items.
Whereas the contemporary order takes the full US tariffs to its highest on any nation globally, it additionally gives a contemporary window for dialogue. Final Saturday, The Indian Specific reported that key financial ministries had been requested for inputs to sweeten the commerce deal caught on India’s resistance to US demand for entry to the Indian agriculture market.
“This 25 per cent advert valorem obligation can be efficient for items entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. jap daylight time 21 days after the date of the order. There are exceptions for items that had been loaded onto a vessel and in transit earlier than this efficient date and are entered for consumption or withdrawn from warehouse for consumption earlier than 12:01 a.m. jap daylight time on September 17, 2025,” the order acknowledged.
NEW: President Donald J. Trump simply signed an Govt Order imposing a further 25% tariff on India in response to its continued buy of Russian oil.
Right here is the textual content of the Order:
By the authority vested in me as President by the Structure and the legal guidelines of the…
— Fast Response 47 (@RapidResponse47) August 6, 2025
Hours earlier than the announcement of further tariff, Trump, whereas responding to a query from information company ANI on US import of Russian chemical compounds and fertilisers, mentioned: “I don’t know something about it. I’d should examine, however we’ll get again to you on that.”
On Wednesday, The Indian Specific reported that US imports from Russia had been rising, rising 23 per cent year-on-year to $2.1 billion between January and Could this 12 months. The surge was led by a pointy enhance within the import of palladium (37%), uranium (28%) and fertilisers (21%).
Whereas Delhi has known as the concentrating on of India over the acquisition of Russian oil “unjustified and unreasonable” and vowed to take “all vital measures” to safeguard its “nationwide pursuits and financial safety”, Indian exporters are in a repair, scrambling to retain entry to the US, their Most worthy export market, accounting for practically 20 per cent of India’s whole outbound shipments.
‘Can’t soak up excessive US tariffs’
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Reacting to increased than anticipated US tariffs, Indian exporters mentioned they aren’t able to soak up such excessive tariffs. Federation of Indian Export Organisations (FIEO) president, S C Ralhan, mentioned: “This (US) transfer is a extreme setback for Indian exports, with practically 55 per cent of our shipments to the US market straight affected. The 50 per cent reciprocal tariff successfully imposes a price burden, putting our exporters at a 30-35 per cent aggressive drawback in comparison with friends from nations with lesser reciprocal tariff,” he mentioned.
Ralhan mentioned many export orders have already been placed on maintain as consumers reassess sourcing selections in gentle of upper landed prices. For a lot of MSME-led sectors, absorbing this sudden price escalation is solely not viable and margins are already skinny, and this extra blow may drive exporters to lose long-standing shoppers, he mentioned.
CITI Chairman Rakesh Mehra mentioned, “The US tariff announcement of August 6 is a large setback for India’s textile and attire exporters because it has additional difficult the difficult scenario we had been already grappling with and can considerably weaken our potential to compete successfully vis-a-vis many different nations for a bigger share of the US market.”
Mehra appealed to the federal government to urgently take steps to come back to assistance from India’s textile and attire sector throughout these vastly testing occasions given the federal government’s sturdy dedication to extend the competitiveness of native business and assist our corporations turn into main gamers on the world stage.
China largest importer of Russian oil
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By the way, China is the biggest purchaser of Russian oil, at about 2 million barrels per day, adopted by India (slightly below 2 million barrels a day) and Turkey. The US had agreed to decrease tariffs on Chinese language items to 30 per cent from 145 per cent in Could.
The manager order doesn’t make any point out of China, however stipulates a mechanism whereby the US Secretary of Commerce, in coordination with different senior officers, “will monitor if every other nation (past India) is straight or not directly importing Russian Federation oil and advocate additional motion”.
New Delhi-based suppose tank World Commerce Analysis Initiative (GTRI) mentioned that in 2024 alone, China purchased $62.6 billion of Russian oil – greater than India’s $52.7 billion.
Washington avoids concentrating on Beijing due to China’s leverage over vital supplies corresponding to gallium, germanium, uncommon earths and graphite, very important for US defence and know-how, GTRI mentioned.
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“The US has additionally neglected its allies’ commerce with Russia: the EU imported $39.1 billion of Russian items final 12 months, together with $25.2 billion in oil, whereas the US itself bought $3.3 billion in strategic supplies from Russia. The tariffs are anticipated to make Indian items far costlier within the US, with potential to chop US-bound exports by 40-50 per cent.
Hit to India-US ties
Indian officers have indicated that the US is unwilling to barter sectoral tariffs – corresponding to these on metal and cars – which have already impacted practically $5 billion price of Indian exports.
Evan A Feigenbaum, vice chairman for Research on the Carnegie Endowment for Worldwide Peace, mentioned Monday that US-India relations might now turn into a political soccer, particularly in Delhi. He warned that the core understandings that enabled nearer ties could also be at severe danger, as Delhi had largely assumed Washington would take political dangers to strengthen the connection – one thing Trump has not performed and clearly is not going to do.
Feigenbaum mentioned the break up in relations is additional underscored by Trump’s effusive reward for Islamabad and up to date engagement with Pakistan’s military and authorities – developments that increase apparent considerations in Delhi.
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“The US was roiled by India’s ties to Iran, Myanmar and later Russia. Trump and his administration at the moment are shifting to sanction and tariff India over its oil commerce with Russia. This considerably shifts the bar for bilateral relations,” he mentioned.