US President Donald Trump
Credit: Reuters Photo
New Delhi: US President Donald Trump on Wednesday announced a 25% additional tariff on Indian goods as ‘penalty’ for New Delhi’s continued purchase of Russian crude oil, taking the total tariff to 50%, far above the levies on countries like China, Vietnam and Bangladesh.
India has vowed to take necessary steps against the “unreasonable” US action.
As per an executive order signed by Trump, the increased tariff will take effect in 21 days.
“The President found that India is currently importing Russian Federation oil. Accordingly, to address the national emergency stemming from the Government of the Russian Federation’s actions taken against Ukraine, he is imposing an additional 25% tariff on imports from India, effective August 27, due to India’s direct or indirect importation of Russian Federation oil,” the White House said in a statement.
Terming the US decision “unfair, unjustified and unreasonable”, MEA spokesperson Randhir Jaiswal said India will take all actions necessary to protect its national interest.
“The US has in recent days targeted India’s oil imports from Russia. We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India,” Jaiswal said in a statement.
“It is therefore extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest,” he added.
The new tariff will be in addition to the 25% duty announced by Trump on July 30, which takes effect from August 7.
Trump’s action threatens most of India’s $86.5 billion per annum exports to the US as rivals like China, Vietnam and Bangladesh face lower taxes.
“This move is a severe setback for Indian exports, with nearly 55% of our shipments to the US directly affected,” said Federation of Indian Export Organisations (FIEO) president S C Ralhan.
“The 50% reciprocal tariff effectively imposes a cost burden, placing our exporters at a 30–35% competitive disadvantage compared to peers from countries with lesser reciprocal tariff,” Ralhan added.
The move comes as a big setback for the Modi government as Trump has so far not targeted China, which is the biggest buyer of Russian crude. In 2024, China bought Russian oil worth $62.6 bn, while India’s import was at $52.7 bn.
“Washington avoids targeting Beijing because of China’s leverage over critical materials such as gallium, germanium, rare earths, and graphite, vital for US defence and technology,” said Global Trade Research Initiative (GTRI) founder Ajay Srivastava.
The EU imported $39.1 bn of Russian goods last year, including $25.2 bn in oil, while the US itself bought strategic materials worth $3.3 bn.
“India could think of not buying Russian oil if it is economically unviable, but should not abandon Russian oil purchases simply to satisfy Washington. The US may find a new pretext to tax India again,” Srivastava said.