New Delhi: US President Donald J. Trump Wednesday announced that India will pay a 25 percent tariff starting 1 August, as trade negotiations between New Delhi and Washington D.C. continued to stall over contentious issues including agriculture and dairy. India will also have to pay a penalty for its continued purchase of oil from Russia.
“Remember, 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 said in a post on the social media platform Truth Social.
The American President added: “Also, 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 will therefore be paying a tariff of 25%, plus a penalty for the above starting on August 1st. Thank you for your attention to this matter. MAGA!”
India and the US have been in negotiations over a mini-trade deal since Trump announced his global tariffs on 2 April. Trump along with Prime Minister Narendra Modi also announced a larger bilateral trade agreement during the former’s visit to Washington D.C. in February.
Negotiations for the mini-deal were focused on reducing the additional levies Trump had announced on a number of countries above the baseline 10 percent tariff. The American President took aim at a number of economies that maintained a large trade surplus with the US. India exported goods worth roughly $77 billion to the US last year, while importing items worth roughly $42.1 billion—maintaining a $35 billion trade surplus.
Trump has long railed against India’s duties, going so far as to label New Delhi as the “tariff king”. The additional tariffs above the 10 percent baseline announced in April were paused for 90 days, a deadline that passed on 9 July.
Days before the deadline was set to elapse, Trump extended the deadline further to 1 August, in the hope of seeing a number of deals being struck. The American President has been able to sign deals with the European Union (EU) and Japan recently, while deals with the UK and Vietnam are some of the ones he struck since April.
There was expectation that the mini-deal would be announced between India and the US a week or so ago. However, the negotiations stalled over the language regarding agriculture and dairy sectors. India is said to have agreed to an extent to allow imports of certain American agricultural products, as well as processed dairy products.
However, negotiations have so far been unable to lead to a final mini-deal. The next round of negotiations are scheduled to be held in the second-half of August in New Delhi.
Trump’s promise to levy additional penalties on India for its purchase of Russian oil is the latest pressure tactic the American President is attempting to apply on Moscow to sign a ceasefire deal with Ukraine. Trump had promised to end the Russia-Ukraine war within 24 hours of assuming the presidency last year, while on the campaign trail.
However, his diplomatic efforts seven months into his second term have borne little fruit. Even a partial cease-fire agreed to by Russian President Vladimir V. Putin fell through. Trump in the early months of this year applied pressure on Ukrainian President Volodymyr Zelenskyy for a ceasefire deal to end the war.
The war continued to rage for nearly three and a half years. US Senator Lindsey Graham had a couple of months ago announced his intention to introduce a bill that would give Trump the power to impose tariffs of up to 500 percent on countries that purchase Russian energy, in an attempt to further apply economic pressure on Moscow.
In the 2024-2025 financial year, India imported Russian energy roughly worth $56 billion and is one of the largest buyers of Russian oil. India has maintained that its energy security is of paramount importance. Early in July, the EU also imposed a set of secondary sanctions on entities dealing with Russia, including the Vadinar refinery in India.
(Edited by Viny Mishra)
Also read: India-US set to ink mini trade deal soon, reach understanding on agricultural & dairy products