US tariffs on India come into effect

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The United States on Wednesday activated additional 25% tariffs on Indian products in alleged retaliation for India's purchase of Russian crude oil, in addition to the 25% tariffs already imposed earlier this month.

With the punitive measure, which came into effect at midnight this Wednesday, Washington aims to punish India for continuing to buy Russian crude oil, a policy the Indian government has advocated for reasons of energy security and inflation control.

The tariffs do not affect all exports, but focus on key sectors to generate social and economic pressure , such as textiles , gemstones and seafood , while exempting other products in which the US has interests, such as pharmaceuticals and electronics.

The Indian government estimates that 55% of the total value of its merchandise exports to the United States will be affected by the new 50% tariffs imposed by Washington, according to an official statement presented to Parliament in the middle of this month.

India is the fourth-largest apparel exporter to the United States, with a market share of around 6%. Although this figure has grown in recent years, it still lags behind its main Asian competitors: China, which dominates with 21%, and Vietnam, with 19%.

With the new 50% tariff imposed by the United States, India is at a major disadvantage compared to those countries, which face tariffs between 20% and 30%.

The White House invoked the International Emergency Economic Powers Act (IEEPA), a national security instrument, to impose the tariff policy, arguing that India's purchase of Russian oil poses a threat to US security.

Last week, in an attempt to minimize the impact of the sanctions, Russia expressed its willingness to offer India an alternative to exports that might be affected by US tariffs.

US President Donald Trump signed the executive order on August 6 to impose these additional 25% tariffs on India over New Delhi's ties with Moscow , which are on top of an initial 25% tariff, to correct what Washington considers to be a trade imbalance.

India, the world's third-largest crude oil importer, has adopted a neutral and pragmatic stance in the Ukraine war and has gone from importing less than 2% of Russian oil to more than a third of the country's needs, making Moscow India's main supplier and taking advantage of discounts offered by the Kremlin.

Although the United States' official justification for imposing the tariff increase has focused on India's purchase of Russian oil, in New Delhi, the measure is interpreted as a pressure tactic to unblock the stalled US-India Bilateral Trade Agreement (BTA).

The main sticking points are "red lines" identified by India, such as its refusal to open its market to US agricultural and dairy products as a way to protect millions of Indian farmers.

The United States is India's largest trading partner, with bilateral trade in goods reaching $128.9 billion (€110.9 billion) in 2024.