In a strong statement on Truth Social, U.S. President Donald Trump announced a new 25% tariff on imports from India, effective August 1, 2025. He also mentioned that India will face an additional penalty for its trade and geopolitical actions.
Why the Tariff?
President Trump said that although India is a friend, the country has unfair trade practices:
India has some of the highest tariffs in the world, making it hard for American products to enter its market.
It imposes strict non-monetary trade barriers, which limit U.S. businesses.
India continues to buy most of its military equipment from Russia.
It remains one of the largest buyers of Russian energy, along with China.
Trump criticized India’s actions during a time when the international community wants Russia to “stop the killing in Ukraine.” He emphasized that these policies are “not good” for global peace and trade.
August 1 Deadline Is Final
The President stressed that the tariff will start on August 1 without delay or extension:
> “The August First deadline is the August First deadline — it stands strong and will not be extended.”
He called the upcoming date a “great day for America,” indicating a tougher stance on trade imbalances and foreign policy.
U.S.-India Trade Snapshot (2024)
Here’s a look at trade between the two countries in 2024:
Total Goods Trade: $129.2 billion
U.S. Exports to India: $41.8 billion (↑ 3.4% from 2023)
U.S. Imports from India: $87.4 billion (↑ 4.5% from 2023)
Trade Deficit: $45.7 billion (↑ 5.4% over the previous year)
The data highlights that America imports far more from India than it exports, creating a large trade imbalance — a key focus of Trump’s criticism.
Market Reaction
Following the announcement:
The Indian Rupee (USD/INR) weakened to 87.75, nearing its all-time low of 87.99 touched on February 9, 2025.
The U.S.-listed India ETF ($INDA) dropped more than 1.15% in pre-market trading, signaling investor concerns over future trade tensions.
What This Means
The new tariffs could raise prices on Indian goods in the U.S., affect companies with supply chains in India, and potentially lead to retaliatory measures from India. It may also complicate ongoing trade and defense discussions between the two nations.
As August 1 approaches, global markets will be closely watching how both countries respond to this sharp shift in U.S. trade policy.
India Reviews US President’s Trade Statement
The Indian government has noted the US President’s recent comments on trade between the two countries. It is carefully looking into what the statement could mean for India. Officials said the government will take all necessary steps to protect the country’s interests.
India Won’t Retaliate Against U.S. Tariffs, Focuses on Trade Deal
India is not planning to take any retaliatory steps after U.S. President Donald Trump announced a 25% tariff on Indian goods, per NDTV Profit. Instead, India will continue talks with the U.S. and hopes to finalize a trade agreement by October. The government wants to keep the dialogue open and avoid any move that could harm long-term trade ties. Despite concerns over the impact on exports, India is focusing on finding a peaceful resolution through continued negotiations.
US Tariff on Indian Goods May Be Just the Beginning
According to Capital Economics’ Shilan Shah, the 25% tariff imposed by the US on Indian goods might not be the final step. Former President Trump, who announced the move on Wednesday, also warned of more penalties if India continues buying oil from Russia. While he called India a friend, Trump criticized the country’s strict non-tariff trade barriers. Shah pointed out that this tariff could hurt India’s chances of becoming a strong manufacturing alternative to China. However, talks between the two countries are still ongoing, and there’s hope for a better trade deal.
Bringing you the latest updates on finance, economies, stocks, bonds, and more. Stay informed with timely insights.
Be First to Comment