US President Donald Trump announced on July 30, 2025, that the United States will impose a sweeping 25% tariff on all Indian goods imported into the country starting August 1, in addition to an as-yet-unspecified penalty due to India’s continued purchase of Russian oil and military equipment.

This development follows months of tense negotiations between the US and India, with the White House repeatedly criticizing India’s tariffs—among the highest globally—along with what Trump called “strenuous and obnoxious non-monetary trade barriers” that make it difficult for US goods to enter the Indian market.

Trump delivered the announcement during a White House press conference marking the signing of a Congressional bill, and reiterated these points on his social media platform, Truth Social.

The US President emphasised that while India is considered a US ally and “friend,” the US has historically done “relatively little business” with India in part due to its high tariffs and non-tariff barriers. Trump noted that although Prime Minister Narendra Modi is a personal friend, the US has a significant trade deficit with India—a deficit he argued stems from India’s protectionist policies.

The new tariffs represent an escalation after an earlier move on April 22, when the Trump administration briefly imposed a 26% reciprocal tariff on Indian goods before pausing those levies and maintaining only a 10% baseline tariff on all countries.

The current 25% levy is intended to pressure India to make significant tariff reductions as part of ongoing trade negotiations. According to officials, these negotiations remain active, with a US delegation scheduled to visit India later in August for further talks.

In addition to the blanket tariff, Trump introduced an unspecified penalty explicitly linked to India’s ongoing purchases of Russian energy and defence hardware—a first instance of the US using “secondary tariffs” in this manner.

India is the world’s second-largest buyer of Russian crude oil (after China) and has sourced much of its military hardware from Moscow, drawing repeated warnings and disapproval from Washington, especially since the start of the Ukraine conflict.

Trump further tied the penalty to India’s participation in the BRICS economic coalition, which he described as “anti-United States” and an “attack on the dollar,” suggesting that the US administration sees India’s alignment with BRICS, its continued Russian trade, and its tariff structure as intersecting challenges to US economic and strategic interests.

The move has rattled both diplomatic and business circles in both countries. Indian policymakers have begun reviewing the implications and signaled readiness to “take all steps necessary to secure national interest,” with strong indications that agriculture and key export sectors will be at the center of India’s negotiating position.

Analysts warn that the new tariffs could severely impact India’s major export sectors to the US—including pharmaceuticals, textiles, gems and jewellery, electronics, and IT services—and may discourage global firms from seeing India as an attractive alternative to China for manufacturing and exports.

Despite the tough rhetoric, both Trump and Indian officials indicate that negotiations are ongoing, with room for last-minute deals or adjustments. Trump himself noted at the press conference that India was “willing to cut [tariffs] very substantially,” and hinted that the outcome of talks could still lead to a different arrangement before or after the August 1 deadline.

Trump’s announcement of a 25% tariff—along with a penalty for India’s Russian trade—marks a dramatic turn in US-India trade relations, stemming from longstanding US grievances about India’s high tariffs, as well as increasing US pressure on countries doing business with Russia.

The move is expected to have major implications for trade, diplomacy, and global supply chains as negotiations continue between the two nations.

Based On ANI Report