As Donald Trump’s 25% punitive tariff on India’s Russian oil imports is implemented, raising total US tariffs on Indian goods to 50%, New Delhi describes the action as ‘unjustified’ while remaining receptive to trade discussions—though firmly prioritizing the interests of farmers, small producers, and MSMEs. The Trump administration’s decision to impose a 25% tariff on India for acquiring Russian crude oil took effect on Wednesday, effectively doubling overall US duties on Indian exports to as much as 50%. This move impacts critical sectors such as garments, gems, jewellery, footwear, furniture, and chemicals, following a previous reciprocal 25% tariff. Indian officials have labeled the penalties as ‘unjustified’ but emphasized a measured and responsible response from New Delhi.
Ongoing discussions with Washington aim to explore a potential trade agreement, although India has asserted it will not compromise the interests of farmers, small producers, and MSMEs. Sources have pointed out the inconsistency in US actions, noting that no similar penalties were imposed on nations like China, which imports significantly more Russian oil. They expressed concerns that the additional tariff was not part of the trade negotiation framework established in April and expressed hope that it may be a temporary measure. The escalation of tariffs has strained India-US relations, which had been progressing steadily in recent years in areas such as defence, technology, energy, and security cooperation.
In 2024, bilateral trade in goods reached $129 billion, with India exporting $87 billion to the US. Exporter groups warn that approximately 55% of these exports could be affected, potentially benefiting competitors such as Vietnam, Bangladesh, and China. Prime Minister Narendra Modi reiterated earlier this week that his government will steadfastly protect the interests of farmers and small entrepreneurs, despite international pressures. External Affairs Minister S Jaishankar highlighted trade disputes, Russian energy imports, and Washington’s position on India-Pakistan issues as key challenges affecting current relations. Despite the tariff-related tensions, institutional engagement remains ongoing, with both nations recently conducting 2+2 talks encompassing trade, energy security, defence, and counter-terrorism.