Trump Announces 25% Tariffs on India

U.S. President Donald Trump announced on Wednesday that the United States will impose a 25% tariff on imports from India, effective August 1.

The decision is expected to significantly impact bilateral trade relations and potentially trigger retaliatory measures from New Delhi.

The announcement, made via Trump’s social media platform Truth Social, cited India’s “excessively high tariffs” and non-tariff barriers as reasons for the escalation. While he acknowledged India as a "friend," Trump criticized the imbalance in trade and expressed frustration over India’s strong defense and energy ties with Russia.

“Despite being our friend, India has imposed some of the highest tariffs in the world for years. They also purchase most of their military equipment from Russia and are one of the biggest importers of Russian energy. That’s not good while the world wants Russia to stop killing in Ukraine,” Trump wrote.

Trump’s tariff decision threatens to unravel recent progress in U.S.–India trade negotiations. Both sides had been edging closer to a limited trade agreement, with multiple rounds of talks addressing key sticking points, particularly U.S. demands for greater market access for agricultural and dairy exports.

Indian negotiators had expressed deep concerns over the potential social and economic impacts of opening domestic markets to genetically modified corn, soybeans, wheat, and rice, arguing that such moves could destabilize the livelihoods of millions of small farmers.

Impact on Indian Exports

India exported approximately $87 billion worth of goods to the U.S. in 2024, a large portion of which include labor-intensive products such as pharmaceuticals, textiles, gems, and petrochemicals. Analysts warn the new tariffs could disrupt supply chains and threaten Indian export competitiveness, especially for small- and medium-sized manufacturers.

The U.S. currently runs a $45.7 billion trade deficit with India, which could be partially offset by the incoming tariffs, part of what Trump calls his “Trade Liberation Day” strategy, aimed at reshaping global trade norms through stricter reciprocity.

India is reportedly considering its own countermeasures should the tariff policy be enforced. The South Asian giant imported $42 billion worth of U.S. goods in 2024, including LNG, crude oil, coal, and industrial machinery, sectors that could be vulnerable to retaliatory tariffs or regulatory restrictions.

Despite their strategic alignment on countering China’s growing influence, Indian officials have emphasized their intent to maintain policy sovereignty on issues such as agriculture, digital data governance, and state subsidies.

The tariff announcement also casts doubt on a prior commitment made by Trump and Indian Prime Minister Narendra Modi to reach a Phase One trade deal by Fall 2025 and expand bilateral trade to $500 billion by 2030, a significant leap from $191 billion in 2024.

Analysts believe that unless a breakthrough is achieved quickly, India may become the latest casualty in Trump's broader tariff-centered trade doctrine, joining a list that already includes China, Mexico, and the EU.