New Delhi: As per Donald Trump’s latest announcement, the US will impose an additional 25 percent tariff on Indian imports starting August 27, 2025. With this, the total tariff on Indian goods entering the US will rise to 50 percent. The move is being described as a penalty for India’s continued purchase of Russian oil. Once effective, India will be among the top countries facing the highest US trade tariffs.
Official Notification from the US
The US has already issued the formal notification for the tariff hike, clarifying that this step is a direct response to India’s oil trade with Russia. Trump had previously imposed a 25 percent tariff effective from August 1, 2025. The new order now doubles the impact.
Which Indian Sectors Are Hit the Most?
Some key sectors like pharmaceuticals, semiconductors, and energy are exempt from the tariff. But major industries such as textiles, gems and jewellery, leather, marine products, chemicals, and auto parts will face heavy losses.
Why a Deal Looks Difficult
A trade deal between India and the US seems unlikely. The US wants India to open its markets for American agriculture and dairy products, but India has refused due to the interests of Indian farmers. As a result, India now has to explore other strategies to reduce the economic damage. India’s exports to the US are worth USD 87 billion, or 2.5 percent of India’s GDP. A 50 percent tariff could significantly impact the economy. The India-US trade deficit in 2024 was USD 45.8 billion and could grow further.
India’s 4 Possible Options
Find New Markets Outside the US: India can reduce its dependence on the US by boosting exports to regions like Europe, Southeast Asia, and Africa.
Strengthen Trade With Russia: India can explore deeper trade ties with Russia, including better payment systems (like Rupee-Ruble trade) and consider new oil sources like Venezuela or African nations.
Consider Counter-Tariffs: If talks fail, India may respond by imposing tariffs on select US goods, such as agriculture products or tech items—something it did back in 2019.
Offer Subsidies to Domestic Industries: India can support its affected sectors like textiles and IT by offering government subsidies to reduce the blow of US tariffs.
