The United States will impose a 25 per cent tariff on Indian exports beginning August 7, under a new executive order signed by President Donald Trump. The order, titled “Further Modifying The Reciprocal Tariff Rates”, outlines updated duties on goods from nearly 70 countries, including India, Japan, the UK, Pakistan, and others.
India, which was previously expected to face a 26 per cent tariff, will now be subject to a 25 per cent “reciprocal tariff, adjusted”, according to the list released. The revised levies follow Trump’s earlier announcement on his Truth Social platform, where he also warned of an additional penalty on India for its continued defense and energy purchases from Russia.
While the tariffs are backdated to August 1, the executive order allows a grace period until August 7 for shipments already in transit. Goods cleared for consumption in the US by October 5 will also be exempt, offering some relief to Indian exporters.
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Ajay Sahai, Director General of the Federation of Indian Export Organizations (FIEO), welcomed the limited exemption, noting it would protect shipments already on their way to the US.
Trade expert Wendy Cutler, Senior Vice President at the Asia Society Policy Institute and former Deputy US Trade Representative, warned that the new tariffs could jeopardise prospects for a US-India bilateral trade deal. “The President’s annoyance with India on a range of trade and broader matters rang through his Truth Social post,” she said, adding that US customs would face implementation challenges under the fragmented tariff regime.
The tariffs, which range from 10 to 40 per cent globally, also target Japan (15%), Laos and Myanmar (40% each), Pakistan (19%), Sri Lanka (20%), and the United Kingdom (10%).
In his online post, Trump accused India of maintaining “the most strenuous and obnoxious non-monetary trade barriers” and blamed the country’s “very high tariffs” for the US’s limited business ties with New Delhi. “India is our friend, but we have done relatively little business with them,” he wrote.
Trump also criticised India’s close ties with Russia, including its role as a leading buyer of Russian arms and energy, saying: “They can take their dead economies down together, for all I care.”
He further denounced India’s membership in BRICS, calling the grouping “anti-US” and alleging that its actions represent “an attack on the dollar.” In a White House event, Trump said, “We’re not going to let anybody attack the dollar,” while indicating that ongoing negotiations would determine the scale of additional penalties against India.
India, in response, said it is examining the implications of the executive order and will take “all necessary steps to safeguard and promote national interest.”
The latest developments mark a sharp escalation in trade tensions, as the Trump administration seeks to reshape global commerce through a unilateral tariff regime tied to broader geopolitical alignments and perceived economic imbalances.
With inputs from PTI
