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New Delhi, August 6:
US President Donald Trump has signed an executive order imposing an additional 25% tariff on Indian goods, doubling the total duty on most imports from India to 50%, in what he described as a penalty for New Delhi’s continued purchase of Russian oil.

The order, issued late Wednesday, comes just 14 hours before the first phase of tariffs (25%) was to take effect. The second levy will kick in 21 days later, giving businesses and customs agencies time to adjust.

Trump’s Reasoning 

Trump accused India of being an “unfair trading partner” and linked the hike directly to India’s Russian oil imports, “India has not been a good trading partner because they do a lot of business with us, but we don’t do business with them… I’m going to raise that very substantially because they’re buying Russian oil. They’re fuelling the war machine, and I’m not happy with that,” Trump told CNBC’s Squawk Box.

India Rejects US Move as ‘Unjustified’

Within hours of the announcement, India issued a sharp response, defending its energy purchases from Russia as being based on national energy security imperatives and market economics.
The Ministry of External Affairs (MEA) said, “Targeting India for legitimate crude oil purchases is unjustified and unreasonable, especially when those criticising us continue significant trade with Russia themselves. Unlike others, our trade is a vital national compulsion.” Officials also noted that India had diversified its crude sources, and Russian oil accounted for only a portion of its overall imports.

Impact on Indian Exports

Trade experts warned that the sudden doubling of tariffs to 50% could have severe consequences for Indian exporters, particularly in sectors already facing global demand volatility:

• Textiles & Apparel: Among India’s largest export categories to the US, already under cost pressure, could see a sharp drop in competitiveness.

• Engineering Goods & Auto Components: These rely on stable US markets; higher tariffs could shift orders to other low-cost producers.

• Pharmaceuticals & Chemicals: Indian drugmakers may face higher landed costs in the US, impacting small and mid-sized exporters.

• IT Hardware & Electrical Equipment: Particularly segments like solar modules and electrical machinery may face immediate cancellations of supply contracts. A senior trade analyst said, “At 50% tariff, many Indian goods simply cannot compete. This could lead to rerouting exports to Europe or Southeast Asia, but that takes time and cost restructuring.”

Possible Trade Retaliation?

India has not indicated retaliatory tariffs yet, but officials hinted that “all options are on the table”.
The move also comes amid sensitive India-US defence and technology talks, with the two nations working on semiconductor and defence production partnerships. Trade experts say prolonged tariff tensions could spill into these strategic areas if not resolved quickly.