The Trump administration on Wednesday imposed an additional 25% tariff on Indian imports, pushing some duties to as high as 50% as of Wednesday, U.S. Customs and Border Protection confirmed.
The move has been framed as retaliation for New Delhi’s surging imports of discounted Russian crude.
Foreign Minister S. Jaishankar, India’s top diplomat, ripped the U.S. for targeting New Delhi over Russian oil while giving China and Europe a pass. Both sides have blamed five rounds of failed trade talks on misjudgments and missed signals.
“The government has no hope for any immediate relief or delay in U.S. tariffs,” a commerce ministry official told Reuters.
TRUMP TARIFFS PUSH INDIA CLOSER TO AMERICA’S STRATEGIC RIVALS CHINA AND RUSSIA
Last month, as Trump announced the decision, the president slammed the South Asian country’s “obnoxious” trade barriers and purchases of Russian military equipment.
“Remember, while India is our friend, 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,” Trump wrote on social media.
“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 — ALL THINGS NOT GOOD! INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST. THANK YOU FOR YOUR ATTENTION TO THIS MATTER. MAGA!, he went on.”
The decision – pushed backed until late August – sent the rupee to a three-week low and Indian stock indexes down about 1%, their steepest drop in three months. The Indian government predicts the hit will affect $48.2 billion worth of exports in key sectors like gems, textiles and food.
Pankaj Chadha, president of the Engineering Exports Promotion Council, warned that U.S. orders could fall 20 to 30%. Officials say the new duties could make shipments to the U.S. commercially unviable, triggering job losses and slower economic growth. India is pledging subsidies and aid to soften the blow but has admitted that diversifying to new markets will be difficult.
The U.S. State Department and India’s Ministry of External Affairs both issued statements on Tuesday affirming that after a virtual meeting both had an “eagerness to continue enhancing the breadth and depth of the bilateral relationship.”
“Both sides looked forward to increasing defense cooperation, including signing a new ten-year Framework for the U.S.-India Major Defense Partnership, as well as advancing defense industrial, science, and technology cooperation; operational coordination; regional cooperation; and information-sharing,” the statement read.
TRUMP ISSUES ULTIMATUM, THREATENING TARIFFS OVER DIGITAL TAXES AND REGULATIONS
Participants also agreed to build upon progress under the U.S.-India Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology (COMPACT) for the 21st Century and beyond, according to the release.
Trump’s top economic official, Treasury Secretary Scott Bessent, has accused India of exploiting the war in Ukraine through Russian oil purchases.
“India is just profiteering. They are reselling. What I would call Indian arbitrage — buying cheap Russian oil, reselling it as product — has just sprung up during the war, which is unacceptable,” he told CNBC.
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