Indian Prime Minister Narendra Modi and US President Donald Trump hold a joint press conference in the White House in Washington, DC, on Feb. 13, 2025. Photo: AFP
India has vowed to take “all actions necessary” to protect its national interests after US President Donald Trump doubled US tariffs on India to 50 percent over Delhi’s purchase of Russian oil, reports Arab news.
Trump signed an executive order on Wednesday to place an additional 25 percent tariff on India on top of a 25 percent tariff that is set to come into effect on Thursday, making the South Asian country one of the most heavily taxed US trading partners in Asia.
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The order finds India is “currently directly or indirectly importing Russian Federation oil,” and says it is “necessary and appropriate” to apply the new 25 percent tariff on Indian goods.
The US is India’s top export market, making up about 18 percent of exports and 2.2 percent of its GDP.
Foreign ministry spokesman Randhir Jaiswal said the US decision to impose additional tariffs was “extremely unfortunate,” as Delhi’s imports from Russia “are based on market factors” and done to ensure energy security for the 1.4 billion Indian population.
“We reiterate that these actions are unfair, unjustified and unreasonable. India will take all actions necessary to protect its national interests,” he said in a statement.
The 50 percent tariff could cut Indian GDP by 0.6 to 0.8 percent, according to Anupam Manur, an economist at the Takshashila Institution in Bangalore. The cut would risk India’s economic growth slipping below 6 percent this year.
As the combined tariffs will come into effect 21 days after the signing of the order, India still has time to negotiate with the Trump administration.
“There is speculation that the 25 percent additional tariffs might be a negotiating tactic by the Trump administration, which can be used as a leverage point against India in the upcoming round of trade talks,” Manur said.
“So, India will continue negotiating with the US, but the room for making concessions to the US is getting smaller due to the bad-faith nature of dealings.”
India will likely look at diversifying trade partners, as Washington becomes increasingly “unreliable trading partner with multiple ad-hoc tariff impositions.”
“The recently concluded FTAs (free trade agreements) with Australia and the UK have come at a good time. India will hope to sign a trading arrangement with Europe as well. India will also look to strengthen its trading relationship with the Middle East,” Manur said, highlighting how UAE and Saudi Arabia are India’s third and fifth largest trading partners, respectively.
As India exports about $81 billion goods annually to the US, the impact would be felt in India domestically in labor-intensive industries, such as gems and jewelry, apparel, textiles, auto parts, sea food and chemicals.
Lalit Thukral, president of the Noida Apparel Export Cluster, which employs about one million people, said the 50 percent tariff rate is “too much” for his industry.
“The 50 percent is out of reach now. We cannot do that. It means you have to close your factories, close your business … Buyers who are in the US are running away … They are placing orders to China, Vietnam or a third country. They will not come to India now,” he told Arab News.
“I have been in this field for the last 45 years and for the first time we have seen this kind of situation. This is a very horrible situation. Had we known that this trouble was coming we could have planned it, but we were not ready for this kind of thing to come.”
