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Trump doubles India's tariffs to 50 pc over Russian oil, Congress suggests PM Modi 'shed his ego'

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National Heraldpublisher-detail-arrow
06th August, 2025 21:12 IST

Updated 9:30 p.m. with ministry of foreign affairs statement; an earlier version of this article was published at 9:12 p.m.

US president Donald Trump on 6 August, Wednesday, slapped an additional 25 per cent tariff on goods coming from India as a penalty for New Delhi's continued purchase of Russian oil, a move that is likely to hit sectors such as textiles, marine and leather exports hard.

Trump signed an executive order, 'Addressing Threats to the US by the Government of the Russian Federation', imposing the additional tariff over an above the 25 per cent levy which comes into effect from 7 August, Thursday.

After this order, the total tariff on Indian goods, barring a small exemption list, will be 50 per cent.

"The ad valorem duty imposed... shall be in addition to any other duties, fees, taxes, exactions, and charges applicable to such imports...," the order said.

While the initial duty becomes effective on 7 August, the additional levy will come into effect after 21 days, or on 27 August.

"I find that the Government of India is currently directly or indirectly importing Russian Federation oil. Accordingly, and as consistent with applicable law, articles of India imported into the customs territory of the United States shall be subject to an additional ad valorem rate of duty of 25 per cent," it said.

India buys about 88 per cent of its crude oil, which is converted into fuels like petrol and diesel, from overseas. Russian oil made up for hardly 0.2 per cent of all the crude oil that India imported until 2021. After Moscow invaded Ukraine, Russian oil was available at a discount to international benchmarks due to western sanctions and was quickly lapped up by Indian refiners. Russia is now India's largest oil supplier.

India may face USD 11 billion annual oil shock if forced to scale back Russian imports

In July, India imported about 5 million barrels of oil a day, of which 1.6 million came from Russia.

After the new levy, India will attract the highest tariff of 50 per cent, along with Brazil. After this, India's competitors will be much better placed in the US market as their duty is lower — Myanmar (40 per cent), Thailand and Cambodia (both 36 per cent), Bangladesh (35 per cent), Indonesia (32 per cent), China and Sri Lanka (both 30 per cent), Malaysia (25 per cent), Philippines and Vietnam (both 20 per cent).

Several Indian political leaders rose up in indignation at the announcement, while businesspersons seemed rueful.

The Indian ministry of foreign affairs has put out a statement on the fresh levy to say that India’s decisions on its imports are determined by "market factors" and made with "the overall objective of ensuring the energy security of 1.4 billion people" in this nation.

Claiming India will take all necessary action to safeguard its interests, the MEA statement also said that the US actions are "unfair, unjustified and unreasonable" — especially given that the same actions are being taken by several others countries too, in their national interests.

The statement called the US' 'choice', therefore, "extremely unfortunate".

Among the several Opposition leaders clamouring for a sharp response from the Narendra Modi government was the Congress' Jairam Ramesh, who did not hesitate to highlight the many occasions where the Indian prime minister has gone out of his way in vociferous support of the second-time POTUS — from the Ab ki baar Trump sarkar of 2019 at the Howdy Modi event in Houston to the Namaste Trump gala of 2020, to the wooing of former Trump right-hand man and DOGE chief billionaire Elon Musk, of SpaceX and Tesla fame.

"Now President Trump, while still claiming to be a friend of Mr. Modi, has hit India hard and unjustly. While his tariff and penalty actions are simply unacceptable, the fact remains that they also reflect the abysmal failure of Mr. Modi's personalised and headline-grabbing style of huglomacy," posted Ramesh on X.

He went on to advise PM Modi that he "should shed his ego — if indeed that were possible — and take inspiration from the manner in which [Indira Gandhi] stood up to the USA" instead.

The Trump announcement comes at a time when a US team is scheduled to visit India from 25 August for the sixth round of negotiations for the proposed bilateral trade agreement (BTA).

The sectors, which will have to bear the brunt of these tariffs include textiles / clothing, gems and jewellery, shrimp, leather and footwear, animal products, chemicals, and electrical and mechanical machinery.

The exempted goods that will not be subject to the high tariffs include pharmaceuticals; energy products such as crude oil, refined fuels, natural gas, coal and electricity; certain critical minerals; and a wide range of electronics and semiconductors, such as computers, tablets, smartphones, solid-state drives, flat panel displays and integrated circuits.

According to exporters, the move would affect India's USD 86 billion worth of exports to the US severely.

"It is extremely shocking. It will impact India's 55 per cent of exports to US," Federation of Indian Export Organisations (FIEO) DG Ajay Sahai said.

In 2024–25, the bilateral trade between India and the US stood at USD 131.8 billion (USD 86.5 billion exports and USD 45.3 billion imports).

The announcement is being seen as a pressure tactic to get New Delhi to agree to demands made by the US in the proposed BTA.

The US is seeking duty concessions on certain industrial goods, automobiles, especially electric vehicles, wines, petrochemical products, agri goods, dairy items, apples, tree nuts and genetically modified crops.

The two countries are aiming to conclude the first phase of the pact by fall (October–November) this year.

With PTI inputs

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