Trump slaps 25% tariff 'plus penalty' on Indian exports

July 31, 2025 by News Desk

In a major escalation of trade tensions, former US President Donald Trump on Wednesday announced a 25% tariff on Indian exports starting August 1, citing India’s “high trade barriers” and continued defence and energy ties with Russia.

“Remember, while India is our friend, they have the most strenuous and obnoxious non-monetary trade barriers of any country,” Trump posted on Truth Social. “They have always bought most of their military equipment from Russia… India will therefore be paying a tariff of 25 percent, plus a penalty… starting on August 1.”

Trump did not specify details of the “penalty” beyond the tariff.

The move comes amid stalled talks for a bilateral trade deal. India-US trade reached $130 billion in 2024, with India enjoying a $45 billion surplus. Key exports like generic drugs, auto parts, and textiles may now face stiff competition from nations like Vietnam and Indonesia, which already have trade deals with the US.

India has defended its reliance on Russian defence imports, calling them essential for national security. A sixth round of US-India trade talks is expected in mid-August.

New Delhi has yet to officially respond, but the Commerce Ministry said, “The government is studying the implications… and remains committed to a fair, balanced trade agreement. The welfare of our farmers, entrepreneurs, and MSMEs remains our top priority.”