Washington|New Delhi: US President Donald Trump has imposed an additional 25 percent tariff on Indian imports, doubling total duties to 50 percent, but exempted crude oil and refined fuel exports — a carve-out that spares a key pillar of India’s Russian oil trade that the US itself relies on. The order, signed Wednesday evening, cites India’s continued import of Russian oil as justification for the new duties. Yet it avoids targeting one of the most consequential outcomes of that trade: India’s re-export of refined fuels made from Russian crude, much of which is shipped to the United States.
US President Donald Trump on Wednesday signed an executive order imposing an additional 25 percent tariff on imports from India, citing the country’s continued purchases of Russian oil. “I find that the Government of India is currently directly or indirectly importing Russian Federation oil,” Trump said in the executive order, invoking national interest grounds for the increased trade barriers.
The initial tariff of 25 percent will take effect from August 7. And the new duties will come into effect 21 days from the date of the order (August 6). Together, they will raise the total tariff burden on Indian goods entering the US to 50 percent.
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The order specifies that the additional 25 percent duty will apply to all Indian-origin goods entering the US for consumption on or after 12:01 a.m. EDT, 21 days from August 6, excluding consignments already in transit before that time and arriving before September 17, 2025.
In a strongly worded response, the Ministry of External Affairs (MEA) issued a statement Wednesday evening calling the US move “extremely unfortunate” and signalling possible retaliatory action.
“The United States has in recent days targeted India’s oil imports from Russia. We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India. It is therefore 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. We reiterate that these actions are unfair, unjustified and unreasonable. India will take all actions necessary to protect its national interests,” the MEA said.
India is currently the ninth-largest source of US imports, with trade in goods totalling over USD 118 billion in FY24, according to US Census Bureau data. The new tariff makes Indian exporters among the hardest hit by US trade penalties, along with Brazil (which also faces a tariff of 50 percent) — second only to China, which accounts for over 13 percent of all US imports.
By comparison, the US imposes 25 percent tariffs on a wide range of goods from China, its top import source. Imports from other top exporters like Mexico, Canada, Germany, and Japan — which together with China make up the top five — face significantly lower or no broad-based tariff penalties.
Trade analysts say the move could disproportionately impact Indian sectors such as textiles, auto parts, and pharmaceuticals — segments where India enjoys strong market share and price competitiveness in the US. After the tariffs take effect, India's competitors will be better placed in the US market as tariffs on their exports to the US are lower, like, Myanmar (40 percent), Thailand and Cambodia (36 percent each), Bangladesh (35 percent), Indonesia (32 percent), China and Sri Lanka (30 percent each), Malaysia (25 percent) and Philippines and Vietnam (20 percent each).
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The sectors which will face the brunt of these tariffs include textiles, gems and jewellery, shrimp, leather and footwear, animal products, chemicals, and electrical and mechanical machinery.
Notably, the executive order exempts Indian exports of crude oil and refined fuels from the new 50 percent tariff. This comes despite public criticism of India’s imports of Russian crude — a trade that has enabled India to become a major supplier of refined oil products to global markets, including the US.
As reported by Energy Watch earlier, according to a February 2024 report by the Centre for Research on Energy and Clean Air (CREA), the United States was the largest importer of oil products made from Russian crude after the G7-led price cap came into effect in December 2022. Many of those products were shipped from India.
The exemption underscores the strategic selectivity of the tariff move: while framed as a penalty for Russian oil trade, the action leaves intact a supply chain that the US itself depends on.
The other products which have been exempted from the imposition of high tariffs include, pharmaceuticals, natural gas, coal, electricity, critical minerals, and a wide range of electronics and semiconductors, like computers, tablets, smartphones, solid-state drives, flat panel displays and integrated circuits.
While the US has long urged India to cut energy ties with Russia, the tariff escalation underscores rising friction between the two nations despite deepening cooperation in defence, technology, and the Indo-Pacific.
New Delhi has repeatedly defended its oil imports as “driven by affordability and energy security”, and has maintained that these purchases do not violate any international sanctions.
With the first in a series of new tariffs now signed into law, both sides are expected to enter a tense phase of trade diplomacy over the coming weeks. Indian officials have not yet specified what countermeasures they may take but have signalled a firm stance.
