The recent announcement by US President Donald Trump to impose an additional 25% tariff on Indian exports that are linked to Russian oil—raising the total duties to 50%—has triggered significant diplomatic and economic tensions between the United States and India.
This move comes as part of a broader US effort to penalise countries importing Russian goods, citing actions and policies of the Russian government as threats to US national security and foreign policy interests.
The executive order, signed by President Trump, explicitly targets India by imposing the highest tariff rate in Asia, and is set to take effect in 21 days.
According to the Indian government, these measures directly follow Washington’s recent actions focused on India’s oil imports from Russia.
Indian officials have expressed their strong objection, labelling the additional tariff as “unfair, unjustified, and unreasonable.” The foreign ministry underscored that India’s energy imports—including from Russia—are determined by market conditions and the country’s need to secure energy for its population of 1.4 billion.
Significantly, India emphasised that it is not the only major economy engaged in purchasing Russian oil and goods, arguing that European nations and even the US continue various forms of trade with Russia involving critical commodities like uranium, palladium, fertilisers, and numerous industrial materials.
In its response, India has reiterated that it will take “all actions necessary to protect its national interests,” refusing to yield to pressure tactics and highlighting what it views as double standards in US policy.
The Indian government pointed out that at the onset of the Ukraine conflict, the US itself had encouraged additional Russian oil imports by other nations to stabilise global energy markets.
Furthermore, India notes that the US response has selectively targeted Indian exports while leaving Chinese and European imports largely unaffected, deepening concerns over discrimination and a lack of a level playing field.
President Trump, for his part, has been openly critical of India’s trade practices and its ongoing purchases of Russian oil, accusing New Delhi of fuelling the Russian war effort.
In a recent interview, he justified the tariff hike by asserting that such actions are necessary to address ongoing national security emergencies and to pressure India to reconsider its trade strategies.
Despite Indian protests and warnings of economic fallout, Trump has made it clear that he does not intend to extend similar penalties to other large trading partners such as China or European countries, even if they maintain significant commercial relationships with Russia.
The imposition of these punitive tariffs could have substantial implications for Indian industry and the broader Indo-US economic relationship. Sectors expected to be hit hardest include textiles, auto components, tires, chemicals, agrochemicals, and cut and polished diamonds—major export categories for India.
The increased cost burden threatens to undermine the competitiveness of Indian products in the US market, potentially widening the trade imbalance and prompting Indian firms to seek alternative markets or reconsider supply chain arrangements.
If sustained, these tariffs may also incentivise companies to shift parts of their export-oriented manufacturing to locations not subjected to US duties, disrupting long-standing commercial ties.
In summary, the latest round of US tariffs marks a significant escalation in trade tensions, with both policy and political overtones.
India, while maintaining its focus on national and energy security, has vowed to protect its economic interests and push back diplomatically.
The outcome of this dispute will likely have far-reaching ramifications not just for bilateral trade, but for global supply chains and international efforts to navigate the complex economic consequences of the ongoing Russia-Ukraine conflict.
Based On A NDTV Report
