In a dramatic move, U.S. President Donald Trump announced a 25%
tariff on all Indian exports to the United States effective August 1,
citing India’s high trade barriers and close ties with Russia, particularly in
the defence and energy sectors. An additional penalty, though
unspecified in value, will also be levied due to India’s ongoing oil and arms
purchases from Moscow.
“India is our friend, but their tariffs are among the
highest in the world,” Trump posted on Truth Social, adding that India
also imposes “obnoxious non-monetary trade barriers.” He criticized India’s
reliance on Russian military equipment and energy supplies at a time when
“everyone wants Russia to stop the killing in Ukraine.”
Trump emphasized that while new trade deals with nations
like Japan, the EU, and Vietnam have capped tariffs at 15–20%, India’s rate
would be 25%—the highest after China, which currently faces 30% amid ongoing
trade negotiations.
In response, India’s Ministry of Commerce and Industry
issued a measured statement, saying it has “taken note” of Trump’s
announcement and is “studying its implications” carefully. The ministry
reaffirmed India’s commitment to a fair and balanced bilateral trade
agreement, noting that a sixth round of negotiations is scheduled
for late August when a U.S. delegation will visit New Delhi.
India also emphasized its commitment to protecting the
interests of farmers, MSMEs, and entrepreneurs, and highlighted its
recent Comprehensive Economic and Trade Agreement (CETA) with the UK as
an example of balanced trade diplomacy.
External Affairs Minister S. Jaishankar and other
Indian officials have repeatedly defended India’s oil purchases from Russia,
citing economic necessity. “We import over 80% of our energy. What would you
have us do—switch off our economy?” asked Indian High Commissioner to the UK, Vikram
Doraiswami.
Though the tariffs are a blow to ongoing trade discussions,
officials on both sides indicate that the move may be temporary, with progress
on a phase-one trade deal expected in the coming months.
For now, India's stance remains firm: national interest
will guide its trade and energy decisions, even amid escalating
geopolitical tensions.
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