India is facing 50% tariffs on its exports to the United States – among the highest levied against any US trading partner – as tensions rise between the two nations over New Delhi’s continued purchase of Russian oil.
On 6 August, US President Donald Trump signed an executive order adding 25% on top of an already existing 25% rate on Indian imports. The new tariffs are set to take effect on 27 August , with exemptions for items already in transit and arriving before 17 September.
The US is India's largest export market, with shipments totalling more than US$87bn in 2024, up US$3.8bn from the year before. The tariffs threaten to hit sectors such as textiles, footwear, auto parts, seafood, and gems and jewellery. Pharmaceuticals and electronics remain exempt for now.
When announcing the sharp tariff hike, the White House pointed to India’s ongoing oil trade with Russia as the reason behind the move. Trump has argued that New Delhi’s import of Russian crude undermines US foreign policy and finances Moscow’s war on Ukraine.
India is one of the biggest buyers of Russia’s oil, along with China and Turkey, with Russian oil accounting for up to 40% of India's overall oil supplies.
In a statement responding to the new tariffs, India’s Ministry of External Affairs condemned Trump’s decision as “unfair, unjustified and unreasonable”.
“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 interest,” the statement continued. “India will take all actions necessary to protect its national interests.”
The new policy follows five rounds of inconclusive trade talks between Washington and New Delhi, which stalled over US demands that India stop Russian oil purchases and give the US wider access to Indian agriculture and dairy markets.
Analysts warn the policy is expected to make Indian goods more expensive for US consumers, impacting the country’s reputation as a global manufacturing hub. It could end up cutting India’s exports to the US by 40–50%, Ajay Srivastava, founder of the Global Trade Research Initiative, a New Delhi-based think tank, told the Economic Times.
It also casts further uncertainty on a global trade system already marked by volatility. The punitive tariffs on India are a stark example of “the deliberate and muscular unpicking of the rules‑based multilateral global system,” said Marco Forgione, director general of the Chartered Institute of Export & International Trade, in a statement.
"This is not just about India and the US; it signals that trade policy is increasingly being used as a geopolitical tool, bypassing the forums and processes designed to manage disputes. When that happens, exporters everywhere are left operating in an environment where market access can change overnight, not over years of negotiation.”