US Tariff Hike on Indian Goods

The United States, under President Donald Trump’s administration, has announced a significant increase in tariffs on Indian imports. This decision follows India’s continued purchase of Russian oil, which the White House claims is funding Moscow’s military activities in Ukraine. The executive order, signed today, imposes an additional 25% tariff on Indian goods, set to take effect in 21 days. This new levy will be added to an existing 25% tariff scheduled to begin on Thursday, effectively doubling the total duty on Indian imports to 50%.

India’s Position in Global Tariff Rankings

With this new tariff structure, India now shares the highest tariff rate with Brazil at 50%. Other countries affected by similar measures include Switzerland at 39%, Canada and Iraq at 35%, and China at 30%. The Indian government has expressed its discontent with the US decision, emphasizing that its oil imports from Russia are driven by market factors and the need to ensure energy security for its population of 1.4 billion.

Reciprocal Tariffs on Global Imports

In addition to targeting India, Trump’s order introduces “reciprocal” tariffs ranging from 10% to 41% on imports from 69 countries and territories. These tariffs are set to be implemented from August 7, coinciding with an extended deadline for a tariff agreement with Mexico. Brazil will face an additional 40% levy starting August 1 due to US concerns over the legal proceedings against former President Jair Bolsonaro.

Implications for US-India Relations

The Trump administration’s decision is linked to what it describes as a “national emergency,” citing India’s indirect support of Russian oil imports. Prime Minister Narendra Modi has attempted to maintain a neutral stance between the US and Russia amidst the ongoing conflict in Ukraine. However, this balancing act has led to tensions with Western nations that have imposed sanctions on Russia.