India has called Donald Trump's hefty tariffs "unfair" after the US president slapped an additional 25 per cent duty on New Delhi as punishment for importing Russian oil.
The new import tax, effective 21 days after 7 August, will raise duties on some Indian exports to as high as 50 per cent. However, three weeks would allow India and Russia the opportunity to negotiate with the US administration on the import taxes.
Experts say this marks a low point in US-India relations, which could harm the gains the two sides have worked hard to build over the past few years. Indian prime minister Narendra Modi has been urged by opposition parties and the general public to stand up to Mr Trump.
India's foreign ministry in a statement late on Wednesday said: “We reiterate that these actions are unfair, unjustified and unreasonable".
The foreign ministry added: "We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India.
"It is therefore 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."
New Delhi warned that India will take all necessary measures to safeguard its national interests and economic security.
What do the tariffs imply for India?
While India has emerged in recent years as a key partner for Washington in its strategic rivalry with China, its large US trade surplus and close relations with Russia have made it a prime target in the Republican president's global tariff offensive.
The tariffs threaten to disrupt India's access to its largest export market, where shipments totalled nearly $87bn (£65bn) in 2024, hitting sectors like textiles, footwear, gems and jewellery. The increased duties place Indian exporters at a 30 to 35 per cent disadvantage versus trade rivals in Vietnam, Bangladesh and Japan, according to Reuters.
In 2024, the US ran a $45.8bn (£34.2bn) trade deficit in goods with India, meaning America imported more from India than it exported, according to the US Census Bureau.
The planned tariffs on India contradict past efforts by the Joe Biden administration and other nations in the Group of Seven leading industrialised nations that encouraged India to buy cheap Russian oil through a price cap imposed in 2022. The nations collectively capped Russian oil a $60 (£44.9)per barrel at a time when prices in the market were meaningfully higher.
Mr Trump on Tuesday rued that India "has not been a good trading partner, because they do a lot of business with us, but we don't do business with them".
He told CNBC: "We settled on 25 per cent, but I think I'm going to raise that very substantially over the next 24 hours, because they're buying Russian oil. They're fuelling the war machine."
In his latest post on Truth Social, Mr Trump claimed: "BILLIONS OF DOLLARS, LARGELY FROM COUNTRIES THAT HAVE TAKEN ADVANTAGE OF THE UNITED STATES FOR MANY YEARS, LAUGHING ALL THE WAY, WILL START FLOWING INTO THE USA."
"IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!"
Which Indian industries will face the impact?
Industry experts warn that key Indian export sectors such as leather, chemicals, footwear, gems and jewellery, textiles, and seafood will face significant setbacks due to the US tariffs.
"The new tariffs are likely to make Indian products substantially more expensive in the US market, with the potential to slash exports to the US by 40–50%," said think tank Global Trade Research Initiative.
Organic chemical exports to the US will face an effective duty of 54 per cent, while carpets, knitted apparel, woven apparel. diamonds, gold, machinery and mechanical appliances will face levies between 50 to 60 per cent.
The Confederation of Indian Textile Industry (CITI) has expressed deep concern over the potential negative impact, calling it a major blow to the industry.
"This move is a serious setback for India's textile and apparel exporters. It adds to the already difficult environment we’re facing and will severely undermine our competitiveness against other countries in the US market," the organisation said, according to PTI news agency.
Future of India-US relations?
Mr Trump has intensified his criticism of New Delhi and Moscow, labelling them as "dead economies" in a social media post last week. The US president had similarly threatened additional tariffs over New Delhi’s "massive purchases of Russian oil", which he claimed fuelled Moscow's war in Ukraine.
The US president has been warned his latest tirade threatens to undo two decades of diplomatic progress, analysts and officials say, and could derail other areas of cooperation as domestic political pressures drive both sides to harden their stances.
"This will cast a shadow over the broader relationship and compromise other bilateral goals. Leadership-level talks need to step in and calm down sentiments to resolve issues through effective backchannelling,” said Farwa Aamer, Director of South Asia Initiatives at Asia Society.
"India would not want to compromise relations with Russia either, so this will be a tough road to navigate. Prudent foreign policy is more crucial than ever to ensure that India can continue the balancing act it had so far mastered."
She added: "If US-India ties get strained further, it only helps China's maintain and expand its influence. It also makes a strong case for India to ensure that its own relations with China remain stable."
Mr Trump's executive order imposing the extra tariff did not mention China, which also imports Russian oil, but later said he could announce similar further tariffs on Chinese goods.
Last week, US treasury secretary Scott Bessent warned China that continued Russian oil purchases could trigger new tariffs, as Washington prepares for the expiry of a US-China tariff ceasefire on 12 August.
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