US President Donald Trump on Wednesday signed an executive order imposing an extra 25 percent tariffs on India for its purchase of Russian oil, increasing the total amount of tariffs the US has placed on its trade partner to 50 percent. India and Russia may have time to negotiate with the Trump administration on the import taxes before the tariffs take effect, which would happen in 21 days.
The signing of the executive order has alarmed both American manufacturers and policy experts, who worry that these tariffs could end up hurting businesses in the US and strain the relationship between their nation and India, an important global partner.
Chris Sununu, a former Republican governor, told CNBC Television that US manufacturers are most worried about the tariffs on Indian products. “Since they’re our ally, this should be the simple one. I’m not a manufacturer, so I can’t tell you why, but that’s the one I hear the most worries about. Isn’t India going to be the global player?” he asked.
Effective 21 days from Wednesday, this steep increase targets key Indian export sectors including textiles, footwear, gems, and jewellery, and is among the highest-ever tariff imposed on a US trade partner. Exemptions remain for select products like pharmaceuticals and electronics, but most affected sectors account for nearly 55 percent of Indian exports to the US.
The move follows a breakdown in trade negotiations after five unsuccessful rounds, mainly due to US demands for greater access to India’s agricultural and dairy markets. The decisive trigger was India’s refusal to reduce its $52 billion annual Russian oil imports, which the US now labels a “threat to national security” and foreign policy in the context of the ongoing Russia-Ukraine conflict.
Trump’s remarks and the executive order explicitly connect the tariff hikes to New Delhi’s continued purchase of Russian oil. He has threatened to consider similar actions against China, another major importer of Russian oil, although no such order covering Beijing has yet been signed.
This tariff escalation marks a significant downturn in US-India relations, which had recently improved following a high-profile bilateral summit. Trump’s tone has notably shifted, accusing India of profiting from discounted Russian crude while ignoring the humanitarian crisis in Ukraine.
Meanwhile, Indian Ministry of External Affairs has strongly criticised the tariffs as “extremely unfortunate” reiterating that their purchases are guided by market conditions and national energy needs.
The timing coincides with Indian Prime Minister Narendra Modi’s upcoming visit to China for the first time in seven years, suggesting shifting geopolitical priorities as India’s ties with Washington are under strain. Economic analysts warn the tariffs could cut Indian exports to the US by up to 50 percent, undercutting India’s global competitiveness and impacting jobs in export-driven sectors.
Despite US claims that other countries, including the US itself, continue to trade with Russia, India remains the highest-profile target for these new measures. The Indian government has pledged to take all necessary steps to defend its economic interests and called out perceived western double standards on Russian trade.