Trump’s Imposed Tariffs on India

Trump’s Imposed Tariffs on India

President Donald Trump’s 50% tariff on Indian imports, which is anticipated to affect commerce worth billions of dollars and threaten thousands of jobs in the world’s most populous country, went into force on Wednesday. On July 30, the US placed a 25% duty on India, followed by another 25% tax a week later, citing New Delhi’s purchase of Russian crude oil.

know more about: India, Saudi Arabia Group to Deepen Maritime Cooperation

Sectors will be the worst hit

• According to the GTRI, textiles, diamonds, jewellery, shrimp, and carpets will be the most affected, with exports expected to fall by 70%, “endangering hundreds of thousands of jobs”.
• He stated that “the US is India’s largest trading partner, although India is not a large trading partner for the US,” and that textile, garment, gem and jewelry, fishery, leather, and craft exports will suffer.
• “Venu described tariffs as affecting sectors that are ‘very, very labour-intensive’ and tiny businesses that cannot withstand the damage.”They will lose businesses to Vietnam, Bangladesh, and Pakistan, and other East Asian economies.”

Industries  exempt

• The Indian pharmaceutical industry has been excluded from immediate tariff rises due to the importance of generic pharmaceuticals in delivering affordable healthcare in the United States. India accounts for over half of the United States’ generic medicine imports.
• Meanwhile, semiconductors and consumer electronics will be subject to separate, sector-specific US levies. Finally, aluminium and steel products, as well as passenger vehicles, will be subject to tariffs distinct from the blanket 50% rate.

The Indian government is taking steps to mitigate the impact

• In response to tariff increases, Prime Minister Modi has committed to protecting farmers, lowering taxes, and promoting self-reliance.

• “India should become self-sufficient, not out of desperation, but out of pride…” “Economic selfishness is on the rise globally, and we must not sit and cry about our problems,” Modi said during his Independence Day speech at New Delhi’s Red Fort.

• According to Faisal Ahmed, professor of geopolitics at the Fore School of Management in New Delhi, boosting India’s domestic productive capacity is not a new phenomenon. It was a policy decision made by Modi during the COVID-19 epidemic. Trump’s tariffs appear to have accelerated that trend.”

• In addition to the $12 billion income tax cut announced earlier this year, the Indian prime minister stated that businesses should expect a “massive tax bonanza” soon. It is also understood that Delhi intends to reduce and simplify the goods and services tax.

• This, combined with an increase in the salaries of roughly five million state employees and 6.8 million retirees (which will take effect next year), should help India’s economy maintain its economic momentum.

• An Indian commerce ministry official told Reuters earlier this week that tariff-hit exporters would receive financial support and other incentives to diversify into other markets such as Latin America and the Middle East.

• “Venu, a former editor of the Financial Express, claims that while the central bank and the prime minister have given guarantees, policymakers have implemented no meaningful policy.”

• As a result, there is little clarity on how the subsidies will be provided. Even if subsidies are granted, they will not be sufficient to soften such a significant effect.”

• He claimed that the government had not prepared for what was coming. “India should have had a policy; it should have done its homework because we knew that Trump was not going to relent, he was going to punish India for buying Russian oil.”

• “Indian media reported on Wednesday that the US market’s dominance might compel Indian authorities to reconsider their overreliance on it.” New Delhi may also consider entering multilateral trade agreements, something it previously opposed.

The reasons Trump gave for tariffs

• Talks to defuse a trade war broke down in response to Trump’s demands that India stop importing Russian oil and gas.
• Despite the ongoing prospect of increasing US tariffs, India has continued to import Russian crude this year.
• New Delhi has also been impacted by the geopolitical competition between Russia and the West. Top Trump administration officials, including US Treasury Secretary Scott Bessent, have accused India of supporting Russia’s war against Ukraine. He pointed out that India’s Russian oil imports increased from 1% before the Ukraine war to 37%. He accuses India of “profiteering”.
• India’s foreign ministry stated that the government will. “Take all necessary steps to protect its national interests.” And stressed that Russian oil imports are driven by market forces and the energy demands of the country’s 1.4 billion population.
• New Delhi has also accused Washington of targeting India for acquiring Russian oil with the European Union and China.
• Trump, who has ignited a trade battle that has rattled the global economy, has highlighted India’s high tariffs.
• “India has been, to us, the most tariffed country in the world. “It’s very difficult to sell to India because they have trade barriers. And very high tariffs,” Trump stated during Prime Minister Modi’s visit to the US in February.
• To allay Trump’s concerns about trade imbalances, New Delhi promised to abolish duties on select industrial items from the US. However, it refused to open up its enormous agricultural and dairy sectors to low-cost US imports.
• “Modi will stand firm against any measure that harms their interests. India would never compromise on preserving our farmers’ interests,” the Indian prime minister stated on August 15.
• Last year, bilateral trade between India and the United States totaled roughly $212 billion, with a trade imbalance of approximately $46 billion.
• Trump’s stern posture has encouraged India to improve relations with rival China, with a bilateral trade worth over $136 billion. India is also prepared to welcome the Russian President as part of its efforts to strengthen historic ties with Moscow.

Conclusion

The United States imposed a 50% tax on Indian exports, which will double, dramatically escalating economic tension. A business bargaining mismatch—”reciprocal tariffs”—sparked the issue. And the strategic overlay of penalising India’s Russian oil purchases has aggravated it significantly. “These acts cause serious and far-reaching consequences. Large industries may experience export breakdowns. They may cost millions of jobs, and they may slow GDP growth by about one percentage point.” However, there are still buffering factors: India’s diverse export portfolio, domestic consumption, reforms, and expansion.

FAQs

What are the details of these tariffs?

The United States initially placed a 25% “reciprocal” tariff on Indian products. In August 2025, President Trump imposed an additional 25% penalty, citing India’s ongoing imports of Russian oil. These apply to significant exports such as clothing, gemstones, jewelry, furniture, chemicals, and others.

Why were the tariffs imposed?

The first 25% came from failed trade negotiations aimed at securing lower tariffs with India. “Officials characterized the additional 25% as a punitive step in light of India’s purchase of Russian oil.”