Trump doubles tariff on India to 50% on Russian oil trade, MEA terms it unjust

US President Donald Trump on Wednesday imposed additional 25 per cent tariff on Indian goods in response to New Delhi’s Russian oil imports. The latest order raises the total duty on Indian imports to 50 per cent, with New Delhi calling the move “extremely unfortunate”.

The US has imposed this additional tariff for Russian imports only on India while other buyers such as China and Turkey have so far escaped such measures. The 30 per cent tariff on China and 15 per cent on Turkey is lower than India’s 50 per cent.

Duty disparity

The US imposed high tariff for Russian imports only on India while other buyers like China (30%) and Turkey (15%) spared

India’s other competitors will also be better placed in the US market as their duty is lower

They are Myanmar (40%), Thailand and Cambodia (36%), Bangladesh (35%), Indonesia (32%), Sri Lanka (30%), Malaysia (25%), Philippines and Vietnam (20%)

While the initial duty of 25 per cent becomes effective on August 7, the additional levy will come into effect after 21 days or August 27.

A White House statement said, “The President found that India is currently importing Russian oil. Accordingly, to address the national emergency stemming from the government of the Russian Federation’s actions taken against Ukraine, he is imposing an additional 25 per cent tariff on imports from India, effective August 27, due to India’s direct or indirect import of Russian oil.”

The Ministry of External Affairs (MEA) termed the development “extremely unfortunate” and stated that India would take all necessary steps to protect its national interests. “It is extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interests. We reiterate that these actions are unfair, unjustified and unreasonable,” it said in a statement.

Regarding Russian oil imports, the MEA clarified that India’s purchases were driven by market factors and aimed at ensuring energy security for its 1.4 billion people. Russia has become India’s top crude supplier, accounting for over 30 per cent of total imports in 2024, a sharp increase from just 0.2 per cent before the Ukraine war began in 2022.

The White House argued that India’s oil purchases from Russia undermined US efforts to counter Moscow’s actions in Ukraine, adding that India’s resale of Russian oil at a profit further supported Russian economy and its aggression. The US also warned other countries of similar penalties if they continued trade with Russia.

The tariffs on India are 20 per cent higher than those applied to China and 31 per cent more than those on Pakistan. The increased tariffs are expected to raise prices of Indian goods in the US market.

While the government has not provided exact estimates, experts predict a 30 per cent decline in exports to the US, from nearly $87 billion to $60 billion, due to the higher duties. This could erode India’s competitiveness in the US market compared to other Asian nations like Vietnam, Indonesia and Bangladesh, which face lower tariffs.

Trump had initially announced reciprocal tariffs in April to address trade deficits but delayed implementation until August 1 to allow trade negotiations. The latest tariffs threaten to strain the Indo-US relations as both countries work toward a trade deal aiming to double bilateral trade to $500 billion by 2030. A US team is set to visit New Delhi on August 25 to discuss key issues, including agriculture and dairy.