Trump adds 25% tariff on India over Russian oil purchases
Sign up now: Get ST's newsletters delivered to your inbox
US President Donald Trump issued the executive order on Aug 6.
PHOTO: EPA
Follow topic:
WASHINGTON - US President Donald Trump on Aug 6 ordered an additional 25 per cent tariff on Indian goods over New Delhi’s continued purchase of Russian oil, a key revenue source for Moscow’s war in Ukraine.
The tariff, set to take effect in three weeks, comes on top of a separate 25 per cent tariff entering into force on Aug 7, according to the text of the executive order released by the White House.
The move is expected to hit key Indian export sectors including textiles, footwear, and gems and jewellery.
The additional tariffs mean India will face the highest levy along with Brazil, putting it at a significant disadvantage against regional competitors such as Vietnam and Bangladesh.
The order also threatens potential penalties on other countries deemed to be “directly or indirectly importing Russian Federation oil”.
Exemptions remain for items targeted by separate sector-specific duties such as steel and aluminium, and categories that could be hit like pharmaceuticals.
“India will take all actions necessary to protect its national interests,” India’s External Affairs Ministry said in a statement.
It said it was “extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest”.
India’s national security adviser Ajit Doval was in Moscow on Aug 6, the media in New Delhi reported, coinciding with a visit by US envoy Steve Witkoff.
India’s Foreign Ministry earlier said US pressure to stop it from buying Russian oil was “unjustified and unreasonable” and that it would protect its interests.
“They’re fuelling the war machine. And if they’re going to do that, then I’m not going to be happy,” Mr Trump said on Aug 5 in an interview with CNBC, referring to India’s purchases of Russian energy.
The iShares MSCI India ETF fell to session lows after Mr Trump’s announcement. Oil prices jumped and the Indian rupee weakened sharply against the dollar.
The move threatens to further complicate US-India relations and comes shortly after an Indian government source said Indian Prime Minister Narendra Modi would visit China for the first time in over seven years later in August.
US-India ties are facing their most serious crisis in years after talks with India failed to produce a trade agreement.
Mr Trump accused New Delhi of refusing to ease access for American goods and criticised its membership in the Brics group of developing economies.
He has been ramping up pressure on India after signalling fresh sanctions on Moscow if it did not make progress by Aug 8 towards a peace deal with Kyiv, as Russia’s devastating invasion of its pro-Western neighbour drags on.
Mr Trump had also suggested that he would impose increased levies on other countries, including China, that like India buy energy from Russia.
“We’ll be doing quite a bit of that,” Mr Trump told reporters. “We’ll see what happens over the next fairly short period of time.”
Ukraine’s allies have said energy purchases by India, China and other nations have propped up Russia’s economy and undercut pressure on Moscow to end a war that is now in its fourth year.
As part of his quest to reorder the global trading system, Mr Trump has imposed steep tariffs on America’s trading partners, with the bulk of those set to go into effect on Aug 7.
Even before the latest tariffs kick in, revenue from taxes collected on imported goods has grown dramatically so far in 2025.
Customs duties, along with some excise taxes, generated US$152 billion (S$196 billion) through July, roughly double the US$78 billion netted over the same period in fiscal year 2024, according to Treasury data.
AFP, BLOOMBERG, REUTERS
