Donald Trump implemented 50% tariffs on the majority of US imports from India, a measure taken in response to India’s acquisition of discounted Russian oil. This action, which came into effect shortly after midnight on Wednesday, could significantly harm the Indian economy and disrupt global supply chains.
Earlier in the month, the US had levied 25% tariffs on Indian goods, but Trump announced his intention to double this rate. This decision was based on India’s purchase of Russian oil, which the White House claims indirectly finances Russia’s conflict in Ukraine.
This increased tariff usage by Trump, affecting numerous countries and generating higher inflation, has strained relations with both allies and rivals. This most recent move sees Indian exporters hit with some of the highest US tariffs imposed under Trump. Similar to India, Brazil is also dealing with 50% tariffs on its exports to the US.
Indian officials argue that their country is unfairly targeted due to its trade relationship with Russia, warning that this could lead to closer ties with Moscow and Beijing, drawing India away from Washington. A significant portion of India’s exports to the US, amounting to $87.3bn last year, are now subject to steep duties, though some critical products like smartphones might be exempt.
This decision, confirmed by the US Homeland Security Department, has led economists to predict a sharp decrease in trade between the two countries. In India, there is a defiant mood regarding these tariffs. Prime Minister Narendra Modi has urged citizens to “buy local” and buy products that are “Made in India.”
Experts warn that these sustained tariffs could decrease India’s GDP growth from around 6.5% to below 6%, with other nations such as Turkey and Thailand, which are subject to lower US tariffs, already gaining favor with American consumers due to their lower costs.
The effects of these tariffs are already being felt, with some textile and apparel manufacturers halting production due to decreased cost competitiveness compared to other Asian countries.
Despite these tensions, US-India trade discussions are ongoing, and hopes for a trade deal have not been abandoned. India has also been forging closer ties with Russia and is making moves to stabilize its relationship with China following a recent clash. The high tariffs may be setting records for the highest number of own goals scored with a top bilateral partner during such a short period.
Source: https://www.theguardian.com/us-news/2025/aug/27/trump-tariff-india-russian-oil-purchase
