Trump to Add 25% More Import Tax on Indian Goods, Raising Total Tariff to 50%

 

Former U.S. President Donald Trump signed an executive order on Wednesday to place an extra 25% tax (tariff) on Indian goods because India continues to buy oil from Russia. With this, the total tariff on Indian imports has now reached 50%.

These new tariffs will start 21 days from the day Trump signed the order. This gives India and Russia a small window to negotiate with the U.S. government.

This move could seriously impact India’s economy. Many American companies had been looking to India as an alternative to China for manufacturing, but the high tariffs might change that. Interestingly, even though China also buys oil from Russia, Trump did not impose these new tariffs on China.

Right now, China faces a 30% tariff from the U.S., which is still lower than the 50% India now faces.

Trump mentioned earlier this week that the U.S. had a meeting planned with Russia to try and end the war in Ukraine. “We’ll see what happens,” he told reporters.

The Indian government responded to the tariffs by calling them “unfortunate” and “unfair.” A spokesperson from India’s Foreign Ministry said the country imports oil based on market needs and to ensure energy for its population of 1.4 billion.

Ajay Srivastava, a former Indian trade official, said these tariffs make India one of the most heavily taxed U.S. trading partners—more than China, Vietnam, or Bangladesh. He warned that Indian exports to the U.S. could drop by 40% to 50% because of the higher costs.

Srivastava also criticized the decision, calling it “hypocritical,” since China actually bought more Russian oil than India last year. He believes the U.S. avoids targeting China because of its control over rare minerals important to U.S. defense and technology.

In 2024, the U.S. imported $45.8 billion more in goods from India than it exported. Many American companies rely on Indian products like medicines, jewelry, textiles, and clothes.

India has remained neutral in the Russia-Ukraine war and hasn’t supported the U.S. sanctions against Moscow. However, Indian leaders have said they want peace.

Currently, the U.S. and China are in trade talks. The U.S. has a 30% tariff on Chinese goods, while China has hit back with a 10% tax on American products.

Trump’s new action goes against earlier policies by the Biden administration and other G7 nations, which had actually encouraged India to buy cheap Russian oil—if it was under a $60 per barrel price cap. This price cap was introduced in 2022 to reduce Russia’s income from oil and limit its ability to fund the war in Ukraine.

The cap tried to make it harder for Russia to sell oil at higher prices, but Russia has avoided it by using old ships and working with countries that don’t follow U.S. sanctions.

Currently, oil is trading at around $65.84 per barrel.

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