In a move sending shockwaves through trade corridors, former US President Donald Trump has signed an executive order slapping an additional 25% tariff on Indian exports, bringing the total import duty to a stiff 50%. The rationale? India’s ongoing purchase of crude oil from Russia, which Trump claims undermines US efforts to isolate Moscow.
This executive order, titled “Addressing Threats to the US by the Government of the Russian Federation,” targets Indian goods specifically, although it notably spares China — the world’s largest importer of Russian crude. According to experts, this move could cripple sectors like textiles, leather, shrimp, gems, and machinery exports from India, making them uncompetitive in the US market.
The first 25% duty takes effect on August 7, while the second wave hits on August 27, allowing a 21-day window for diplomatic negotiations. The Indian government has responded sharply, calling the decision “extremely unfortunate” and reiterated that oil procurement is based on national energy security and market conditions for its 1.4 billion citizens.
India now faces the steepest US tariff rate alongside Brazil. In contrast, other Asian nations such as Vietnam and the Philippines will continue to enjoy lower rates at 20%. Analysts believe this discrepancy further isolates India in trade competitiveness.
Several products are exempt from the new tariff—such as electronics, energy resources, and pharmaceuticals—but nearly 55% of Indian exports to the US will be affected. Textiles, garments, shrimp, and leather are especially vulnerable, with some categories now facing a combined duty of nearly 60%.
Industry bodies such as the Federation of Indian Export Organisations (FIEO) expressed alarm. “This could severely damage our exports,” said Ajay Sahai, FIEO DG. Economists project a GDP hit of 40–50 basis points, potentially dragging India’s FY26 growth below 6%.
Experts interpret the order as a bargaining chip, aimed at forcing India to soften its Russian trade ties and accelerate progress on a long-pending India-US trade agreement. US demands reportedly include tariff cuts on electric vehicles, wine, farm goods, and tech products.
With a tentative trade agreement phase targeted for October–November, India now faces the challenge of balancing its geopolitical stance with the risk of trade isolation. Observers hope diplomacy will prevail before the full tariffs take effect.
