US-India Trade Tensions 2025: 50% Tariffs Kick In
Trump Imposes 50% Tariffs on Indian Imports, Straining US-India Ties
In a dramatic escalation of trade tensions, Donald Trump imposed 50% tariffs on most US imports from India, delivering on a threat to punish New Delhi for its continued purchases of discounted Russian oil. The tariffs, which came into effect just after midnight in Washington on Wednesday, are among the harshest duties the US president has levied since his return to the White House earlier this year.
US-India: A Blow to India’s Economy
India, one of the world’s fastest-growing major economies, faces the prospect of significant losses as the new tariff regime threatens to choke off a vital export corridor. The United States remains India’s single largest export destination, with shipments worth $87.3 billion last year. Now, industries such as textiles, gems, jewellery, and seafood—highly dependent on American demand—risk severe contraction.
The Federation of Indian Export Organisations (FIEO) confirmed that several manufacturers in hubs like Tirupur, Surat, and Delhi have already scaled back or halted production. “At a 50% tariff, Indian goods are simply uncompetitive against rivals from China, Vietnam, and Southeast Asia,” said FIEO president SC Ralhan.
Indian equities reflected the anxiety, with the BSE Sensex plunging 849 points on Tuesday ahead of the official tariff announcement. Economists at Goldman Sachs warned that sustained 50% levies could pull India’s GDP growth below 6%, far short of the projected 6.5%.
Trump’s Justification and India’s Defiance
The White House has repeatedly argued that India’s energy trade with Russia indirectly finances Moscow’s war in Ukraine. “I don’t care what India does with Russia,” Trump wrote on Truth Social last month. “They can take their dead economies down together, for all I care.”
Despite US pressure, India has shown no signs of retreat. Prime Minister Narendra Modi struck a defiant tone, urging citizens to “buy only Made in India goods” to soften the blow. External affairs minister S. Jaishankar went further, denouncing Washington’s demands as “unjustified and unreasonable,” while pointing to Europe’s far larger trade with Russia as evidence of western hypocrisy.
US-India: Trade Tensions and Geopolitical Fallout
The tariff hike places India alongside Brazil, which is also facing 50% duties on exports to the US. However, analysts warn that the consequences for New Delhi could be far more damaging given its heavy reliance on the American market.
Diplomats fear that Washington’s punitive measures could drive India closer to Russia and China. Modi is scheduled to attend the Shanghai Cooperation Organisation summit in China later this year—his first visit since the deadly 2020 Himalayan clash. Meanwhile, Putin is expected in New Delhi for a state visit, signaling deepening Moscow-New Delhi ties.
“Trump has blown it,” said a senior Indian trade official, who requested anonymity. “Years of careful work to strengthen US-India relations have been undone in months. It will take a long time to repair the damage, and probably not while Trump is in office.”
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