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Trump Hits India Imports With 25% Tariff, Threatens More Over Russia
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July 30, 2025
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3:48Now PlayingPresident Donald Trump said he would impose a 25% tariff on India’s exports to the US starting Friday and threatened an additional penalty over the country’s energy purchases from Russia.
Trump on Wednesday said he made the decision because India has tariffs that are “among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country.”
“Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE,” he posted on social media. “INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST.”
Trump’s announcement marks his latest act of brinkmanship ahead of his Aug. 1 deadline for new import taxes to begin on exports from dozens of trading partners.
The levies dash New Delhi’s hopes of preferential treatment over its Asian peers, who have secured tariffs ranging from 15% to 20%. India had been among the first to engage Washington in talks, following Prime Minister Narendra Modi’s high-profile White House visit in February. Bloomberg's Tyler Kendall reports.
India and the US had already finalized terms of reference for a bilateral trade deal following US Vice President JD Vance’s meeting with Modi in New Delhi in April, with both sides committing to a fall deadline. Before Trump’s Wednesday pronouncement, officials in New Delhi has said they would continue negotiating with the US on a bilateral trade deal by this fall.
India remains committed to a bilateral deal that’s “fair, balanced and mutually beneficial,” the government said in a statement. It highlighted the need to protect farmers, entrepreneurs and small businesses, adding that “the government will take all steps necessary to secure our national interest,” as it had done in other deals, including a recently concluded free trade agreement with the UK.
India’s rupee slumped and stock futures declined after Trump’s announcement. The Nifty 50 futures traded at the Gujarat International Finance Tec-City erased their gains to decline as much as 0.5%, while the rupee was down 0.8% to 87.87 to a dollar in offshore trading. It fell to a five-month low in onshore trading on the tariff threat.
“While the trade talks appeared to have broken between the two nations, leading to the US penalizing India, we think that the trade saga and deal haggling isn’t necessarily over,” said Madhavi Arora, an economist at Emkay Global Financial Services Ltd. “There is also a global geopolitical angle to these trade talks beyond just the pure economic angle.”
Shifting Stance
For much of this year, the Modi government had adopted a conciliatory approach toward Trump, revamping India’s tariff structure and offering several trade and immigration concessions to the US. Trump’s advisers had also signaled for months that a trade deal with India was in the cards.
The tone appeared to shift in recent weeks, though, with New Delhi toughening its stance as negotiations hit roadblocks over contentious issues such as agriculture.
Trump also threatened “secondary sanctions” on nations buying oil from Russia, which had the potential to hit China and India. Washington and other allies of Ukraine view such oil purchases as a form of tacit support for Russia, helping to bolster its economy and undercut sanctions.
Trump’s move could further strain already tense relations between the the US and India. The president has repeatedly insisted he used trade to broker a truce that ended a four-day armed conflict between India and Pakistan in May, an assertion vehemently denied by Modi and other top officials in New Delhi.
It also risks undermining longstanding US efforts under previous administrations, including Trump’s first, of cultivating India as a strategic counterweight to China.
India’s main opposition party said Trump’s announcement showed that close ties between Modi and the US leader hadn’t paid off.
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