US tariffs of 50% took effect Wednesday, August 27, on many Indian products, doubling an existing duty as President Donald Trump sought to punish New Delhi for buying Russian oil. Trump has raised pressure on India over the energy transactions, a key source of revenue for Moscow’s war in Ukraine, as part of a campaign to end the conflict. The latest salvo strains US-India ties, giving New Delhi fresh incentive to improve relations with Beijing.
While Trump has slapped fresh duties on allies and competitors alike since returning to the presidency in January, this 50% level is among the highest that US trading partners face. Crucially, however, exemptions remain for sectors that could be hit with separate levies – like pharmaceuticals and computer chips.
The Trump administration has launched investigations into these and other sectors that could culminate in further duties. Smartphones are on the list of exempted products as well. Industries that have already been singled out, such as steel, aluminum and automobiles, are similarly spared these countrywide levies. The United States was India’s top export destination in 2024, with shipments worth $87.3 billion.
But analysts have cautioned that a 50% duty is akin to a trade embargo and is likely to harm smaller firms. Exporters of textiles, seafood and jewelry were already reporting canceled US orders and losses to rivals such as Bangladesh and Vietnam, raising fears of heavy job cuts.
‘Eroded trust’
New Delhi has criticized Washington’s move as “unfair, unjustified and unreasonable.” The world’s fifth-largest economy is looking to cushion the blow, with Prime Minister Narendra Modi promising to lower the tax burden on citizens during an annual speech to mark India’s independence. Modi earlier vowed self-reliance as well, pledging to defend his country’s interests.
The foreign ministry previously said India had begun importing oil from Russia as traditional supplies were diverted to Europe after Russia’s invasion of Ukraine. It noted that Washington actively encouraged such imports at the time to strengthen stability in the global energy market.
Russia accounted for nearly 36% of India’s total crude oil imports in 2024. Buying Russian oil saved India billions of dollars on import costs, keeping domestic fuel prices relatively stable.
But the Trump administration held firm on its tariff plans in the lead-up to Wednesday’s deadline. “India doesn’t appear to want to recognize its role in the bloodshed,” Trump’s trade adviser Peter Navarro told reporters last week. “It’s cozying up to Xi Jinping,” Navarro added, referring to the Chinese president.
