Unfair, unjustified: India on Trump’s 25% additional tariff

India on Wednesday described the US action of levying 25 per cent additional tariff on Indian goods as “unfair, unjustified and unreasonable”.

New Delhi’s sharp reaction came shortly after US President Donald Trump signed an executive order imposing the fresh tariff citing India’s continuing purchase of Russian crude oil notwithstanding the Western sanctions.

Also read: US imposes additional 25% tariff on India amidst trade tensions over Russian oil deals

The new tariff is in addition to 25 per cent levies he has already announced.

In a statement, the Ministry of External Affairs (MEA) said India will take all actions necessary to protect its national interests.

“We reiterate that these actions are unfair, unjustified and unreasonable,” it said.

The MEA said the US has in recent days “targeted” India’s oil imports from Russia.

“We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India,” it said.

“It is therefore 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 interest,” it added.

Trump signed an executive order, “Addressing Threats to the US by the Government of the Russian Federation”, imposing the additional tariff over an above the 25 per cent levy which comes into effect from August 7.

After this order, the total tariff on Indian goods, barring a small exemption list, will be 50 per cent.

“The ad valorem duty imposed...shall be in addition to any other duties, fees, taxes, exactions, and charges applicable to such imports...,” the order said.

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

“I find that the Government of India is currently directly or indirectly importing Russian Federation oil. Accordingly, and as consistent with applicable law, articles of India imported into the customs territory of the United States shall be subject to an additional ad valorem rate of duty of 25 percent,” it said.

India buys about 88 per cent of its crude oil, which is converted into fuels like petrol and diesel, from overseas. Russian oil made up for hardly 0.2 per cent of all crude oil that India imported till 2021. After Moscow invaded Ukraine, Russian oil was available at a discount to international benchmarks due to western sanctions, and was quickly lapped up by Indian refiners. Russia is now India’s largest oil supplier.

In July, India imported about 5 million barrels of oil a day, of which 1.6 million came from Russia.

After the new levy, India will attract the highest tariff of 50 per cent along with Brazil. After this, India’s competitors will be much better placed in the US market as their duty is lower -  Myanmar (40 per cent), Thailand and Cambodia (both 36 per cent), Bangladesh (35 per cent), Indonesia (32 per cent), China and Sri Lanka (both 30 per cent), Malaysia (25 per cent), Philippines and Vietnam (both 20 per cent).

The announcement comes at a time when a US team is scheduled to visit India from August 25 for the sixth round of negotiations for the proposed bilateral trade agreement (BTA).