Washington, D.C. / New Delhi, August 6, 2025 (Agencies) — In a dramatic escalation of trade tensions, U.S. President Donald Trump has imposed a total 50% tariff on Indian goods, citing New Delhi’s continued import of Russian oil as the primary trigger. The move marks the highest tariff rate globally and places India among a small group of major economies without a trade deal with Washington.
The tariff hike includes an additional 25% duty announced on Wednesday, stacking atop an existing 25% levy. The new rate is set to take effect in three weeks, catching Indian officials and global observers off guard.
“This is arguably the worst moment in U.S.–India relations in many years,” said Vina Nadjibulla, Vice President of Strategy at the Asia Pacific Foundation of Canada. “India now finds itself isolated, facing the steepest trade penalties without a deal in place”.
Trump has accused India of “fueling Russia’s war machine” through energy purchases, despite earlier negotiations aimed at expanding bilateral trade. India’s Ministry of External Affairs responded sharply, calling the tariffs “unjustified and based on flawed logic,” and emphasized that its energy imports are driven by market necessity, not geopolitical alignment.
The breakdown in talks comes after India reportedly offered concessions on industrial goods and auto tariffs, but refused to lift duties on politically sensitive sectors like agriculture and dairy. Trump’s administration viewed this as a failure to reciprocate, leading to the punitive measures.
Geopolitical tensions have further complicated the situation. Trump recently claimed credit for mediating a ceasefire between India and Pakistan in May 2025—an assertion New Delhi has publicly denied. Meanwhile, Pakistan has praised Trump’s role and secured new energy and mineral deals with Washington.
With bilateral trade valued at over $212 billion last year and a projected goal of $500 billion in five years, the tariff shock threatens to derail economic cooperation and may prompt retaliatory measures from India.