Winning Bizness Desk
Mumbai. US President Donald Trump has announced a fresh 25% tariff on Indian goods, effective August 1, 2025. The declaration has sparked a sharp reaction from India's opposition party, Congress, which questioned Prime Minister Narendra Modi’s much-publicized friendship with Trump. In a post on platform X, Congress mocked Modi’s foreign policy approach, calling it weak and damaging for India’s economic interests.
Trump cites Russia ties and trade practices
In a post on the social media platform Truth Social, Trump listed two major reasons behind the steep tariff and penalties on India. First, he criticized India for continuing to purchase Russian crude oil and military equipment, alleging it indirectly supports Russian attacks in Ukraine. Second, he claimed India maintains some of the highest tariffs in the world, which create an unfair playing field for American exporters.
US labels Indian trade barriers 'obnoxious'
President Trump also accused India of maintaining non-monetary trade barriers that he described as “obnoxious.” According to him, these trade restrictions, along with India’s high tariffs, contribute to the United States’ substantial trade deficit with India. This position reflects the long-standing concern in Washington that India’s regulatory framework is excessively complex and restrictive, especially for foreign companies.
US trade team to visit India in August
Despite the tariff announcement, dialogue between the two countries is expected to continue. An American trade delegation will visit India on August 25 for the sixth round of discussions related to the Bilateral Trade Agreement (BTA). The aim is to finalize the first phase of the agreement by September or October. The last round of discussions was held in Washington, led by Indian negotiator Rajesh Agarwal and US trade representative Brendan Lynch.
India reportedly sought lower tariffs
According to a Bloomberg report, India had pushed for keeping US tariffs below 10%. In exchange, the US expected some market access for its products in India. However, India refused to compromise on sensitive sectors such as agriculture and dairy, although it expressed willingness to make adjustments in other non-agricultural sectors.
Tariff could hurt Indian exporters
With the 25% tariff now confirmed, Indian exporters may face steeper costs and reduced competitiveness in the US market. The additional burden could particularly impact sectors where India has traditionally enjoyed strong exports. Products such as textiles, jewelry, pharmaceutical goods, software services, and machinery are among India's top exports to the US, and many of these could now see reduced demand due to higher prices.
Global trade impact and next steps
The new tariff is part of a broader strategy by the US to recalibrate trade relationships globally. Several countries have already received similar tariff notifications, and others are expected to face reciprocal duties starting August 1. For India, the move presents a diplomatic challenge and economic risk, especially as trade ties with the US have been a growing pillar of its global outreach strategy.
Story in a nutshell:
- Trump announced a 25% tariff on Indian goods starting August 1, 2025.
- Congress criticized PM Modi’s close ties with Trump following the move.
- The US cited India's Russia links and high tariffs as key reasons.
- Trump called India’s non-tariff trade barriers “obnoxious.”
- India had requested a tariff rate below 10%, which the US rejected.
- A US trade team will visit India on August 25 for BTA talks.
- Indian exporters may suffer as costs rise in the US market.
