Trump Intends to Impose Increased Tariffs on Indian Goods due to Buying of Russian Oil
The ongoing negotiations between the U.S. and China regarding tariffs have taken a back seat, as a different trade dispute is heating up – this time between the U.S. and India. The tariff deadline for U.S.-India trade is approaching, and the stakes are high.
The tariffs, which doubled to 50% on many products from August 27, 2025, have caused Indian exporters significant trouble, particularly in sectors like textiles, leather, gems and jewelry, and automobiles. These sectors are finding it hard to compete with countries like Vietnam and Bangladesh, which have lower tariffs.
The tariffs, imposed under sections 232 and 301 of U.S. trade law, are primarily due to concerns over India's import of Russian oil and geopolitical factors such as India's membership in the BRICS group of emerging economies. The tariffs do not affect pharmaceuticals, electronics, semiconductors, energy products, and critical minerals, but heavily impact dairy and furniture products with tariff rates rising up to 81.46% and 50% respectively.
The delay and eventual suspension of bilateral trade talks between India and the U.S. have further strained relations. The talks, originally scheduled for late August 2025, failed due to disagreements over India's agricultural and dairy markets opening and India's refusal to cease Russian oil imports.
Economists, including Jeffrey Sachs, have criticized the tariffs as counterproductive and damaging to both the U.S. and India. They argue that the tariffs risk years of progress in bilateral ties and undercut U.S. economic interests.
The potential future consequences of this trade dispute are significant. Prolonged trade tensions and the risk of escalation in tariffs or trade barriers could harm Indian exports and U.S. importers reliant on Indian goods. Slower Indian economic growth and reduced foreign investment could result due to export instability and currency depreciation.
India may also face pressure to align its foreign energy policy away from Russia to ease U.S. sanctions pressure, a move that could be politically and economically difficult. This could potentially lead to a fracturing of strategic cooperation between India and the U.S., pushing India to deepen ties with alternative partners such as Russia and China.
Legal and diplomatic battles over the legitimacy of the tariffs under WTO rules and U.S. constitutional authority are also possible.
Despite the criticism and the looming threats, India continues to purchase Russian oil, citing the need to secure affordable energy for its population. The Indian government has rejected the criticism and vowed to protect its economic interests.
Western nations, including the EU, maintain significant trade ties with Russia, adding another layer of complexity to this geopolitical issue.
As the tariff deadline approaches, both nations stand at a crossroads. The path they choose could have far-reaching implications for their economies and their strategic relationships.
- The ongoing trade dispute between the U.S. and India, as evidenced by the tariff impositions, has fuelled a series of policy-and-legislation discussions, with its implications reaching beyond the realm of global trade and into the politics of general news.
- The escalating trade tensions between the U.S. and India, marked by the looming deadline for increased tariffs, are causing waves not only in their respective economies but also in the wider world of policy-and-legislation and geopolitical dynamics.
