U.S. President Donald Trump has escalated trade tensions with India by imposing an additional 25% tariff on Indian goods, citing the country’s ongoing purchase of Russian oil. This new tariff, announced Wednesday, comes on top of a similar 25% duty introduced last week and is set to take effect within 21 days.
The move follows failed talks between the U.S. and Russia aimed at resolving the war in Ukraine. Trump criticized India for continuing to buy Russian energy, accusing it of indirectly supporting the conflict.
“They’re fueling the war machine,” Trump told CNBC on Tuesday, expressing frustration over India’s position.
India quickly responded, calling the tariffs “unfair and unjustified” and promising to defend its economic interests. Indian officials argue that their energy imports are vital for economic stability and accuse the U.S. of hypocrisy, as some Western countries also continue limited trade with Russia.
The market reacted to the news with Indian stocks dropping and oil prices climbing. However, India’s currency held steady against the dollar.
Trade experts warn that the new tariffs could hit Indian exporters hard. Ajay Sahai, head of the Federation of Indian Export Organisations, said the move could cost Indian businesses long-standing overseas clients.
The new duties are part of Trump’s wider trade crackdown, which includes upcoming increases on goods from multiple countries. The administration says the aim is to reduce the U.S. trade deficit and bring back domestic manufacturing. But critics warn it could disrupt global supply chains and lead to higher prices.
Trump has also threatened further tariffs, particularly targeting India’s pharmaceutical sector—one of its largest export industries to the U.S. Such a move could impact over 40% of Indian exports to America, adding to earlier tariffs on steel, aluminum, and automobiles.
Despite past efforts to strengthen U.S.-India ties, especially during Trump’s first term, relations have cooled. Trump has taken a tougher tone recently, accusing India of being economically hostile and uncooperative in trade talks.
The rising tensions come as Trump tries to pressure Moscow into ending its invasion of Ukraine. He has given Russia until August 8 to reach a ceasefire or face new sanctions, and warned other countries, including China, about possible penalties if they continue buying Russian oil.
Talks between Russian officials and U.S. envoy Steve Witkoff on Wednesday showed little progress, though both sides called the discussions “constructive.”
With just days to go before the tariffs take effect, several countries are racing to negotiate exemptions. Switzerland’s president met with U.S. officials in a last-ditch effort to ease a separate 39% tariff on Swiss goods.
