On Wednesday, President Donald Trump announced that India-imported goods would be subject to a 25% tariff beginning in August. 1.
He said India, which has the world’s fifth largest economy, will also face an “While India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country,” Trump wrote in a Truth Social post.unspecified penalty on Aug. 1, but did not elaborate on the amount or what it was for.
They have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD!”
India’s commerce ministry, which is leading the trade negotiations with the United States, did not immediately respond to a request for comment.
The possibility of a limited trade agreement between the two countries, which had been under discussion for several months, is dashed by Trump’s decision. Multiple rounds of negotiations between trade negotiators from the United States and India had been held to resolve contentious issues, particularly those pertaining to market access for American agricultural and dairy products. Despite progress in some areas, Indian officials were against opening the domestic market to imports of genetically modified soybeans, wheat, corn, and rice, citing the risks to the livelihoods of millions of Indian farmers. India’s goods exports to the United States are estimated to reach $87 billion in 2024 due to the new tariffs. These exports include labor-intensive goods like garments, pharmaceuticals, gems and jewelry, and petrochemicals. The United States currently has a $45.7 billion trade deficit with India.
Under Trump’s “Liberation Day” trade policy, which aims to reshape U.S. trade relations by demanding greater reciprocity, India now joins a growing list of nations that face increased tariffs. The White House had previously warned India about its high average applied tariffs — nearly 39% on agricultural products, with rates climbing to 45% on vegetable oils and around 50% on apples and corn.
Despite earlier promises made by Prime Minister Narendra Modi and President Trump to conclude the first phase of a trade deal by fall 2025 and increase bilateral trade to $500 billion by 2030, up from $191 billion in 2024, the setback occurs. U.S. manufacturing exports to India, valued at around $42 billion in 2024, as well as energy exports such as liquefied natural gas, crude oil, and coal, could also face retaliatory action if India chooses to respond in kind.
Indian officials have previously indicated that they view the U.S. as a key strategic partner, particularly in counterbalancing China. However, they have stressed the necessity of maintaining policy latitude in relation to agriculture, data governance, and state subsidies.
Trump says US to impose 25% tariff on India from August 1
