US President Donald Trump announced a 25% tariff on Indian imports starting August 1, 2025, citing India’s high tariffs, “obnoxious” non-monetary trade barriers, and its reliance on Russian military equipment and energy as key reasons. In a Truth Social post, Trump described India as a “friend” but criticized its trade policies, noting a $45.7 billion US trade deficit with India in 2024, with US imports at $87.4 billion and exports at $41.8 billion. He also highlighted India’s purchase of 70% of its military equipment and significant energy imports from Russia, calling it problematic amid global calls to pressure Russia over Ukraine. An additional unspecified “penalty” was mentioned, though details remain unclear.
The announcement follows five rounds of stalled India-US trade talks, with the latest held July 14–18 in Washington, led by India’s Rajesh Agrawal and US’s Brendan Lynch. Key sticking points include India’s refusal to open its agriculture and dairy sectors and its ban on genetically modified crops, while the US seeks greater market access for its tech, dairy, and agricultural products. India’s Commerce Minister Piyush Goyal, optimistic last week, emphasized that any deal must prioritize national interest, rejecting rushed concessions. A US delegation is scheduled to visit Delhi in mid-August for a sixth round, aiming for an interim agreement by September–October. Indian officials told Reuters that the tariffs may be temporary, expecting negotiations to continue.
Trump’s tariff, lower than the 26–27% proposed in April but higher than the 10% baseline for smaller economies, aligns with his “reciprocal tariffs” policy under the International Emergency Economic Powers Act (IEEPA), which raised average US tariffs to 18.2% by July 2025. India’s high tariffs (averaging 17% on US goods, with peaks at 52% on certain products) and non-tariff barriers, like stringent regulations, prompted the move. The decision has raised concerns in India’s export sectors, particularly pharmaceuticals and textiles, though SBI Research suggests minimal economic impact. There was no immediate response from New Delhi, but Foreign Minister S. Jaishankar previously called Trump’s tariff claims “premature.”
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