Trump Imposes Additional 25% Tariff On India, Total Goes Up To 50%

Donald Trump announced an extra 25 per cent tariff on India Wednesday night as 'penalty' for the continued import of Russian crude oil, and vowed similar measures against other countries that buy, directly or indirectly, from that country and fund cash-strapped Vladimir Putin's war on Ukraine.

He had earlier threatened tariffs of 100 per cent unless a peace deal is signed by August 9. 

Trump's latest tax tirade takes total duties on import of Indian goods into the United States to 50 per cent - 20 per cent more the tariff on China and 31 per cent more than on Pakistan.

The 'penalty' tariff will take effect in 21 days.

India's response was swift and terse. A government spokesperson said the US' 'targeting' of India over Russian oil imports is "unfair, unjustified, and unreasonable".

"We have already made clear our position on these issues, including the fact our imports are based on market factors and done with the objective of ensuring the energy security of 1.4 billion people..."

"It is therefore extremely unfortunate the US should choose to impose additional tariffs on India... for actions that several other countries are also taking in their own national interest," the government said.

'In My Judgement...': Trump's Order

In an executive order signed earlier today Trump wrote, "I find the Government of India is currently, directly or indirectly, importing Russian Federation oil... in my judgement I determine it necessary to impose an ad valorem duty on imports of articles from India..."

Prime Minister Narendra Modi and US President Donald Trump (File).

The 50 per cent tariff hit comes hours after angry comments about India-US trade relations.

READ | Trump Doubles Tariff On India To 50%: Full Text Of Order

"India has not been a good trading partner... we settled on 25 percent... but I think I'm going to raise that substantially over the next 24 hours because they're buying Russian oil," he told a US broadcaster.

Those remarks, and others in a similar vein, have threatened to derail ties between two of the largest economies in the world, and possibly change geopolitical and security narratives worldwide, including drawing India, Russia, and Brazil (and possibly China, as a member of the BRICS) closer together.

NDTV Explains | Trump Snubs India, Signs Pak Oil Deal. What Does This Mean?

That potential change has been underlined by Trump giving Pakistan a big rate cut - Islamabad's tariff is down to 19 per cent - and signing a new trade deal, including plans to develop Pak's oil reserves.

Trump Taxes "Our Friend, India"

On July 30 Trump decreed India would pay a 25 per cent tariff in addition to a (then unspecified) 'penalty' for continuing to buy oil and military equipment from Russia.

That was 48 hours before a deadline he had set for 'reciprocal tariffs' on a number of American trading partners, announced in April, but suspended to allow for negotiations.

NDTV Explains | The Story Behind Donald Trump's 25% 'Reciprocal Tariff' On India

He also ranted about India's "strenuous and obnoxious non-monetary trade barriers".

"... India is our friend (but) we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world. And they have the most strenuous and obnoxious non-monetary trade barriers of any country."

READ | "Our Friend" But...: Trump Declares 25% Tariffs Plus Penalty On India

In response to his criticism the Indian government pointed out that many western nations, including the United States, continue to import goods from Russia.

'Not The Only Ones...', Says India

The government said its buying Russian oil was "a necessity compelled by the global market situation", while countries criticising "indulge in trade... for products that are not "a vital compulsion". India pointed to the European Union buying 67.5 billion euros of liquified natural gas, or LNG, from Russia in 2024.

After Trump's "going to raise it substantially threat", India reminded the US that when it began importing from Russia, after the outbreak of the Ukraine conflict, the US "actively encouraged such imports".

READ | "Indulging In Trade With Russia Themselves": India Counters US

The government also pointed to the US' Russia imports. "... the United States continues to import from Russia uranium hexafluoride... palladium... and fertilisers as well as chemicals".

India-US Trade Ties

India-US ties have been on thin ice in recent weeks and months.

This comes as the two sides struggle to reach a trade agreement - negotiations began in December last year, when Joe Biden was President  - that would have seen tariffs on India being cut.

READ | India-US Free Trade 'Mini Deal' Likely By October: Sources

India, however, has refused to accept demands for American farmers to enter its price-sensitive agriculture markets, prompting an irritated Trump to accuse Delhi of being a "very big tariff abuser".

Also last week, senior government sources told NDTV Trump's 25 per cent tariff will have a "negligibe" impact on the Indian economy. The GDP loss is not likely to exceed 0.2 per cent, sources said, echoing what an India-based economist told Bloomberg - that GDP would likely slow by 0.3 per cent only.

That, however, was for the 25 per cent 'reciprocal tariff' only and does not factor in the 'penalty'.

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