US Imposes 50% Tariffs on India, Escalates Tensions
India faces economic blow as US tariffs hit 50%.
The United States, under President Donald Trump, has escalated tensions with India by imposing an additional 25% tariff on Indian goods, effective from 12:01 am EDT on August 27, 2025. This brings the total tariff rate to a staggering 50%, targeting India for its continued purchases of Russian crude oil. The Department of Homeland Security (DHS) announced the measure in a draft order published Monday, stating that the levies apply to Indian products “entered for consumption, or withdrawn from warehouse for consumption” on or after the specified time.
The move follows Trump’s earlier imposition of a 25% reciprocal tariff on August 7, 2025, which also affected around 70 other nations. The additional tariffs were introduced after a 21-day negotiation window failed to yield an agreement on India’s Russian oil purchases. Indian Prime Minister Narendra Modi, responding to the mounting pressure, emphasized protecting the interests of farmers, cattle-rearers, and small-scale industries, stating, “We will bear the pressure, but we won’t compromise.”
The DHS order clarifies that Indian goods already in transit to the US before the deadline may be exempt from the 50% tariff if cleared for consumption by September 17, 2025, and accompanied by a special US Customs code (HTSUS 9903.01.85). However, the sweeping tariffs are expected to disrupt trade significantly.
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Mark Linscott, Senior Advisor at The Asia Group, described the situation as a “remarkable lose-lose,” noting that the US-India trade relationship, once a promising win-win, is now on “thin ice.” He urged both sides to find a path forward to preserve the broader relationship.
Nisha Biswal, a partner at The Asia Group, warned that the 50% tariffs—the highest imposed on any US trading partner—could price Indian textiles and garments out of the US market. She highlighted the loss of previously negotiated low tariff rates and the uncertainty this creates for companies that shifted production to India as part of the China+1 strategy.
Basant Sanghera, Managing Principal at The Asia Group, called the tariffs “highly damaging” to US-India economic ties and India’s manufacturing ambitions. He stressed the need for leader-level engagement to prevent further deterioration of the trade relationship.
The US Treasury Secretary Scott Bessent accused India of “profiteering” by reselling Russian oil, while India has labeled the tariffs “unjustified and unreasonable.” With no immediate resolution in sight, experts suggest that direct talks between Modi and Trump are critical to restoring trust and finding a workable solution.
Also Read: US Draft Notice: 50% Tariffs on Indian Goods From August 27
