President Donald Trump on Wednesday hit India with an extra 25% tariff over its Russian oil deals, bringing total US tariffs on the ally to a steep 50%.
Currently, Brazil is the only other country to face a 50% import tax on all its products across the board.
This does not include the steel, aluminium and copper tariffs, also at 50%, levied on every single country in the world apart from the UK.
The tariffs would go into effect 21 days after the signing of the order, meaning that both India and Russia could still have time to negotiate with the administration on a more favourable deal.
Trump's moves could scramble the economic trajectory of India, a major Asian economy, which until recently was seen as an alternative to China by US companies looking to relocate their manufacturing.
China, which also buys oil from Russia, is currently experiencing a stay on the full tariff measure — currently all Chinese products face a 30% levy — as it negotiates more favourable tariff measures with the US administration.
Trump had previewed for reporters on Tuesday that the tariffs would be coming, saying the US had a meeting with Russia on Wednesday as the Trump administration tries to end Moscow's all-out war in Ukraine.
“We’re going to see what happens," Trump said about his tariff plans. "We’ll make that determination at that time.”
The Indian government on Wednesday called the additional tariffs “unfortunate".
“We reiterate that these actions are unfair, unjustified and unreasonable,” Foreign Ministry spokesperson Randhir Jaiswal said in a statement, adding that India would take all actions necessary to protect its interests.
Jaiswal said India has already made its stance clear that the country’s imports were based on market factors and were part of an overall objective of ensuring energy security for its 1.4 billion people.
Ajay Srivastava, a former Indian trade official, said the latest tariff places the country among the most heavily taxed US trading partners and far above rivals such as China, Vietnam and Bangladesh.
India is widely regarded as an ally, with Indian Prime Minister Narendra Modi having visited the US in February of this year.
“The tariffs are expected to make Indian goods far costlier with the potential to cut exports by around 40%-50% to the US,” he said.
Srivastava said Trump's decision was “hypocritical” because China bought more Russian oil than India did last year.
“Washington avoids targeting Beijing because of China’s leverage over critical minerals which are vital for US defence and technology,” he said.
Coming to terms with the deficit
In 2024, the US ran a $45.8 billion or €52.5 billion trade deficit in goods with India, meaning America imported more from India than it exported, according to the US Census Bureau.
US consumers and businesses buy pharmaceutical drugs, precious stones, textiles and apparel from India, among other products.
India has not supported the Ukraine-related sanctions by the US and its allies on Moscow even as its leaders maintain that they want peace.
Ostensibly, the steep tariff is a means to deprive the Kremlin of revenue to fund its ongoing war in Ukraine, forcing Trump's goal of bringing the Russian government to the negotiating table and possibly agreeing to a ceasefire followed by long-term peace in Ukraine.
But oil prices have fallen, with a barrel trading on Wednesday morning at $65.84 or €75.53, up by 1% on the day new tariffs were announced.
