On August 6, 2025, President Donald Trump signed an executive order imposing an additional 25% tariff on Indian goods, effective August 27, 2025. This action escalates existing trade tensions, bringing the total tariff on many Indian products to 50%. The White House stated that India's continued importation of Russian oil undermines U.S. efforts to counter Russia's activities and that the subsequent reselling of this oil on the open market enables the Russian Federation's economy to fund its aggression.
India's Ministry of External Affairs responded to the tariff imposition, labeling it "unfair, unjustified and unreasonable." The ministry asserted that India's import decisions are guided by national interests and the energy security of its 1.4 billion citizens, and that it would take "all necessary measures to protect its national interests." This stance was echoed by former President Donald Trump, who on August 4, 2025, stated via Truth Social that India's significant purchases of Russian oil, and subsequent reselling for profit, demonstrated a disregard for the conflict in Ukraine, prompting his decision to substantially raise tariffs.
The Federation of Indian Export Organisations (FIEO) President, S C Ralhan, described the initial tariff as a "serious jolt to Indian exports," with industry representatives estimating that the new tariffs could reduce India's exports to the U.S. by 40-50%. Sectors such as textiles, marine products, and leather are anticipated to be the most severely impacted. While exemptions exist for certain goods like steel and aluminum, and potentially pharmaceuticals, the broader impact on India's export economy is a significant concern.
Russia remains India's largest oil supplier, with daily imports reaching approximately 1.6 million barrels in July 2025, amidst crude oil prices as high as $200 per barrel. The additional 25% tariff, effective August 27, 2025, follows an initial 25% tariff that took effect on August 7, 2025.