Trump slaps 50% tariffs on Indian goods over Russian oil buys
Photo: US President Donald Trump (Getty Images)
US President Donald Trump has signed off on a decision to impose 50% tariffs on Indian imports, a move aimed at punishing New Delhi for continuing to buy Russian oil, which, he said, helps finance Moscow’s war against Ukraine, Bloomberg reports.
The new tariffs took effect early Wednesday, doubling the existing 25% duties. They will cover more than 55% of Indian exports to the United States - India’s largest overseas market.
The hardest-hit sectors are labor-intensive industries such as textiles, footwear, jewelry, and toys. Pharmaceuticals and electronics, including Apple’s large-scale investments in India, remain exempt for now.
The White House decision marks a sharp downturn in US-India relations, which in recent years had grown closer as a counterbalance to China. New Delhi slammed the move as “unfair, unjustified, and unreasonable” and vowed to continue purchasing Russian oil.
“This is going to be a very big impact on Indian exporters because 50% tariffs are not workable for the clients,” said Israr Ahmed, Managing Director of Farida Shoes Pvt. Ltd, which depends on the US for 60% of its business
According to Citigroup, the higher duties could shave 0.6-0.8 percentage points off India’s economic growth.
Still, the overall effect may be limited thanks to strong domestic demand, with private consumption accounting for about 60% of the country’s GDP.
The US is India’s biggest export market ($87.4 billion in 2024), but exports make up only around 2% of the country’s GDP.
US rising pressure
Washington has repeatedly pressed India to curb cooperation with Moscow in the oil sector. US officials argue that New Delhi’s purchases of discounted Russian crude provide the Kremlin with vital revenue to sustain its war against Ukraine.
The US Department of Homeland Security on Monday issued a draft notice confirming the tariff hike, which officially took effect on August 27.
