Trump doubles tariff to 50% on Indian goods; New Delhi calls move ‘unfair, unjustified’

New Delhi: India on Wednesday strongly criticised US President Donald Trump’s decision to impose an additional 25 per cent tariff on a range of Indian goods, a measure that effectively raises duties on most affected items to 50 per cent. The move, linked to India’s continued purchase of Russian oil, has drawn a sharp response from the Ministry of External Affairs (MEA), which said the action unfairly singles out India while other nations engaged in similar trade have not faced comparable penalties.

The fresh levy was announced through an executive order signed by Trump titled “Addressing Threats to the US by the Government of the Russian Federation”. According to the order, the additional tariff will come into force 21 days from its signing, on August 27, while an earlier 25 per cent duty will take effect from August 7.

“I find that the Government of India is currently directly or indirectly importing Russian Federation oil,” the order stated. “Accordingly, articles of India imported into the customs territory of the United States shall be subject to an additional ad valorem rate of duty of 25 per cent,” it added.

The MEA expressed strong disapproval, stating, “We reiterate that these actions are unfair, unjustified and unreasonable. Our imports are based on market factors and the overall objective of ensuring the energy security of 1.4 billion people of India. It is extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest.”

Before 2022, Russian crude accounted for less than 0.2 per cent of India’s oil imports. However, following Moscow’s invasion of Ukraine and subsequent western sanctions, Russian crude became available at discounted prices. Indian refiners increased purchases significantly, making Russia India’s largest oil supplier. In July alone, India imported about 5 million barrels per day, of which roughly 1.6 million barrels came from Russia.

New Delhi has maintained that its crude purchases are driven by economic and energy security considerations. “Like any major economy, India will take all necessary measures to safeguard its national interests and economic security,” the MEA said.

India justified its energy interaction with Moscow as a compulsion instead of an option, asserting that it provides consistent and reasonable energy prices for Indian customers. What seems informative, the MEA explained, is the observation that many of the countries now denouncing India maintain their commercial relations with Russia, even though they do not have the same compelling pressures.

In supporting its case, the government quoted trade statistics indicating that the European Union’s bilateral trade in goods with Russia was a whopping €67.5 billion in 2024 while trade in services was put at €17.2 billion in 2023. EU imports of Russian LNG even reached a record high of 16.5 million tonnes in 2024, up from the earlier record of 15.21 million tonnes in 2022. Further, the EU’s trade with Russia went beyond energy to fertilisers, chemicals, iron and steel, machinery, and transport equipment. The hike is expected to affect several of India’s major export categories, including textiles and clothing, gems and jewellery, shrimp, leather goods, footwear, animal products, chemicals, and electrical and mechanical machinery. Pharmaceutical products, crude oil, refined fuels, natural gas, coal, electricity, critical minerals, and certain electronics such as computers, smartphones, and semiconductors have been exempted from the additional duty.

Exporters have warned that the impact could be severe.

In 2024-25, bilateral trade between India and the US stood at USD 131.8 billion, with India exporting goods worth USD 86.5 billion and importing USD 45.3 billion from the US.

The US has imposed this additional penalty specifically on India, while other major buyers of Russian oil have faced lower tariff rates. China faces a 30 per cent duty, Turkey 15 per cent, Myanmar 40 per cent, Thailand and Cambodia 36 per cent, Bangladesh 35 per cent, Indonesia 32 per cent, Sri Lanka 30 per cent, Malaysia 25 per cent, and the Philippines and Vietnam 20 per cent. After the latest order, India’s tariff rate will match that of Brazil at the top end of the scale.

Exporters warn that this disparity could erode India’s competitiveness in the US market. “Our competitors will now have a much better position because their duty rates are lower,” one industry representative said.

This is the second time in three days that India has issued a strong statement on the matter. Earlier in the week, New Delhi criticised both the US and the European Union for what it described as targeting India over its Russian energy ties while themselves continuing certain forms of trade with Moscow. The MEA noted that the US continues to import items such as uranium hexafluoride for its nuclear sector, palladium for electric vehicles, as well as fertilisers and chemicals from Russia.

The timing of the move is notable. A US delegation is scheduled to visit India on August 25 for the sixth round of talks on the proposed Bilateral Trade Agreement (BTA). Observers see the tariff announcement as adding strain to those negotiations.

The US has been seeking concessions from India on industrial goods, automobiles—especially electric vehicles—wines, petrochemicals, agricultural products, dairy items, apples, tree nuts, and genetically modified crops. Both sides had been aiming to conclude the first phase of the BTA by October or November this year.

For now, India has signalled it will not back down on its oil procurement policy. “Our position is clear,” the MEA stated. “We will continue to act in the best interest of our people and our economy, and we will take all actions necessary to protect our national interests.”