Washington/Mumbai — President Donald Trump has followed through on a threat to punish India over its purchases of discounted Russian oil, hitting most U.S. imports from the country with a 50% tariff.
The steep duties, which kicked in just after midnight Wednesday in Washington, threaten to deal a heavy blow to the world’s fifth‑largest economy and further strain global supply chains. They also come on top of a 25% levy imposed earlier this month — a rate Trump abruptly doubled after citing India’s oil trade with Moscow, which the White House says indirectly funds Russia’s war in Ukraine.
Since returning to the White House in January, Trump has hiked U.S. tariffs on goods from allies and rivals alike, stirring fears of higher inflation and rattling diplomatic ties. Now, Indian exporters face some of the highest U.S. duties of any nation, alongside Brazil, which is also grappling with a 50% rate.
India Pushes Back
New Delhi insists it has been unfairly targeted for maintaining its trade relationship with Russia and warns the move could push it closer to Moscow and Beijing. Most Indian exports to the U.S. — worth $87.3 billion last year — are now subject to the steep tariffs, though smartphones will escape the hike for now.
Despite the tariffs, Prime Minister Narendra Modi struck a defiant tone, urging Indians to buy local:
“Pressure on us may increase… but we will bear it,” he told supporters, calling for a nationwide push to display and sell “Made in India” goods.
Economists predict a sharp fall in U.S.-India trade. Goldman Sachs’s chief India economist Santanu Sengupta warned sustained 50% duties could pull GDP growth below 6%, down from around 6.5%. Lower‑tariff rivals like Turkey and Thailand are already courting American buyers with cheaper offers.
Export Sectors Under Pressure
About 30% of Indian goods — including pharmaceuticals, electronics, raw drug materials and refined fuels — remain duty‑free, but hard‑hit industries such as textiles, gems, jewellery, and seafood are feeling the squeeze. The Federation of Indian Export Organisations says some textile hubs have already halted production, citing lost cost competitiveness against suppliers from China, Vietnam and other Asian countries.
The benchmark BSE Sensex fell 1% in Mumbai on Tuesday, ahead of the tariff rollout. The U.S. remains India’s biggest export market, accounting for roughly one‑third of shipments in key sectors.
Diplomatic Fallout
A senior Indian trade official said years of trust‑building with Washington are now “at risk” and may take a long time to repair. External Affairs Minister S. Jaishankar blasted U.S. demands to end Russian oil imports as “unjustified and unreasonable,” accusing the West of hypocrisy given Europe’s own trade with Moscow.
While Trump has targeted India, he has not imposed similar measures on China, another major buyer of Russian oil. He has also moved to ease tensions with Russia, inviting President Vladimir Putin to a summit in Alaska and even floating a trilateral meeting with Ukraine’s Volodymyr Zelenskyy.
Despite the rift, Jaishankar says trade talks remain open. But earlier hopes for a tariff cap of 15% collapsed when India refused to open its agriculture market to U.S. farm products, fearing harm to poor farmers.
Looking East
India is deepening ties with Russia, which it calls an “all‑weather friend,” and is preparing for high‑level visits from both Putin and Modi’s first trip to China in seven years. Analysts expect New Delhi to engage with Beijing cautiously but acknowledge economic necessity will drive cooperation.
Veteran South Asia analyst Michael Kugelman called the tariffs “one of the biggest self‑inflicted blows” to U.S.-India relations in recent memory.
