US Announced 25% Tariff and Penalty on India Over Russia Ties

Washington: In a move widely seen as coercive and politically charged, US President Donald Trump on Wednesday announced a sweeping 25 per cent tariff on all Indian goods effective August 1, alongside an unspecified penalty targeting India’s continued trade with Russia, particularly in the defence and energy sectors.

The abrupt declaration came just a day after Indian officials confirmed that a US delegation was scheduled to visit India on August 25 for the next round of bilateral trade talks, raising serious questions about US’s intentions and diplomatic integrity.

The tariff and penalty are being interpreted as pressure tactics aimed at forcing India to fall in line with US’s geopolitical and trade agendas. In a social media post, Trump disparaged India’s trade regime as "most strenuous and obnoxious', claiming the US has done “relatively little business” with India due to its high tariffs and non-monetary trade barriers.

A worker displays US dollar banknotes at a money exchange outlet in New Delhi on July 31, 2025 (Photo by Arun SANKAR / AFP)

“India will therefore be paying a tariff of 25 per cent, plus a penalty for the above, starting on August first,” Trump declared, without elaborating on the nature or scale of the penalty.

The penalty stems from India’s rising import of Russian crude oil and military hardware, a long-standing bilateral relationship that has continued despite Western attempts to isolate Moscow. Since the onset of the Russia- Ukraine war, India’s oil purchases from Russia have skyrocketed from a meagre 0.2 per cent to around 35-40 per cent of its total imports, making India the second- largest buyer of Russian crude after China.

This is the first time US has openly penalised a country for purchasing Russian energy and arms, exposing the extraterritorial overreach of US economic policy. The move disregards India’s strategic autonomy and legitimate energy security concerns in favour of US’s political agenda.

In another caustic remark on Wednesday, Trump dismissed both India and Russia as economic failures. “I don't care what India does with Russia. They can take their dead economies down together, for all I care,” he said, further straining diplomatic ties.

A pharmacist (R) attends a customer inside his shop in New Delhi on July 31, 2025. (Photo by Sajjad HUSSAIN / AFP)

India has not officially responded to the announcement, though sources indicate that top officials are in emergency consultations to assess the implications. It remains unclear whether the new 25 per cent tariff is in addition to the already existing 10 per cent baseline tariff that was applied to most Indian goods in April and remains in effect.

The US’s tariff levels remain inconsistent across trading partners. For instance, tariffs on Vietnamese goods stand at 20 per cent, Malaysia at 25 per cent, Bangladesh at 35 per cent, and Thailand at 36 per cent, figures that raise concerns over the arbitrary and uneven application of trade measures.

Despite these hostilities, the sixth round of India-US trade talks is still scheduled for late August. The fifth round concluded recently in Washington, led by India’s Special Secretary in the Department of Commerce, Rajesh Agrawal, and US Assistant Trade Representative Brendan Lynch.

The US has been India’s largest trading partner between 2021 and 2025. In 2024-25 alone, bilateral trade reached USD 186 billion. India exported goods worth USD 86.5 billion while importing USD 45.3 billion, registering a surplus of over USD 41 billion in merchandise trade. In services, India earned an additional USD 3.2 billion surplus, bringing the total trade surplus to about USD 44.4 billion.

Critics argue that US’s punitive actions against India undermine ongoing trade negotiations and reflect a broader pattern of weaponising tariffs for political leverage, a strategy that threatens the foundations of fair and rules-based international trade.

India’s key exports to the US in 2024