New Delhi, August 7, 2025: India has pledged to take “all actions necessary” to defend its national interests following U.S. President Donald Trump’s decision to double tariffs on Indian goods to 50 percent, citing Delhi’s continued imports of Russian oil.
On Wednesday, President Trump signed an executive order imposing an additional 25 percent tariff on Indian exports to the U.S., on top of the 25 percent tariff scheduled to take effect on Thursday. The move makes India one of the most heavily taxed U.S. trading partners in Asia.
The executive order states that India is “currently directly or indirectly importing Russian Federation oil,” and argues that it is “necessary and appropriate” to impose increased tariffs as a response.
The U.S. is India’s largest export market, accounting for 18 percent of India’s exports and contributing about 2.2 percent of the country’s GDP.
India’s Ministry of External Affairs spokesperson, Randhir Jaiswal, termed the move “extremely unfortunate”, emphasizing that India’s energy imports from Russia are “based on market factors” and are crucial to ensure energy security for its 1.4 billion people.
“We reiterate that these actions are unfair, unjustified and unreasonable. India will take all actions necessary to protect its national interests,” Jaiswal said in a formal statement.
Economist Anupam Manur from the Takshashila Institution estimated that the 50 percent tariff could reduce India’s GDP by 0.6 to 0.8 percent, potentially dragging economic growth below 6 percent this year.
“There is speculation that the additional tariffs may be a negotiating tactic by the Trump administration, intended as leverage in upcoming trade talks,” Manur said. “But India’s room for concessions is shrinking, particularly given the bad-faith nature of recent U.S. trade actions.”
India is now expected to diversify its trade relationships, especially as Washington is viewed as an increasingly unreliable partner due to repeated ad-hoc tariff impositions.
“The recently concluded Free Trade Agreements (FTAs) with Australia and the UK have come at a good time,” Manur added. “India will likely push for a similar arrangement with Europe, and also strengthen ties with the Middle East—notably the UAE and Saudi Arabia, which are India’s third and fifth largest trade partners respectively.”
The sharp tariff hike is expected to hit India’s export-driven sectors hard, particularly labor-intensive industries such as apparel, textiles, gems and jewelry, auto parts, seafood, and chemicals. India currently exports around $81 billion worth of goods to the U.S. annually.
Lalit Thukral, President of the Noida Apparel Export Cluster, which employs around one million workers, warned of devastating consequences.
“The 50 percent tariff is just too much. It means shutting down factories and businesses. U.S. buyers are pulling out and placing orders with China, Vietnam, or elsewhere,” he told Arab News.
“In my 45 years in this industry, I have never seen such a situation. It’s horrible. If we had known this was coming, we could have prepared. But we were blindsided.”
