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Aug 1, 2025: As a result of President Donald Trump's executive order detailing the various duties that Washington will impose on exports from countries all over the world, India will be subject to tariffs of 25% on its goods that it sells to the United States. In the Executive Order titled ‘Further Modifying The Reciprocal Tariff Rates', Trump announced tariff rates for nearly 70 nations.
India has been subjected to a "Reciprocal Tariff, Adjusted" of 25%, according to the published list. The executive order however does not mention the “penalty” that Trump had said India will have to pay because of its purchases of Russian military equipment and energy.
Pakistan’s tariff rate has been reduced to 19% from 29%.
Trump announced the 25% tariff on India and an additional penalty for New Delhi's purchases from Russia on Wednesday in a post on Truth Social, his social media website. While August 1 was the tariff deadline, the new levies will come into effect from August 7.
In April, Trump had announced that India will face a 26 per cent “discounted reciprocal tariff”, a per cent higher than the rate announced now.
Responding to the executive order, Senior Vice President of the Asia Society Policy Institute (ASPI) and former Deputy US Trade Representative Wendy Cutler said in a statement that India, a “promising candidate for an early agreement”, was assigned a 25 per cent tariff.
This "doubts the viability of a bilateral trade agreement." The President's annoyance with India on a range of trade and broader matters rang through his Truth Social post,” Cutler said.
Ajay Sahai, Director General of the Federation of Indian Export Organizations (FIEO), stated that the order eases restrictions for goods in transit and those loaded onto ships for their final voyage to the United States by August 7. Goods cleared for consumption in the US by October 5 will also not be subject to reciprocal tariffs, thus providing some relief to exporters of goods already shipped or likely to be shipped this week.
According to Cutler, US customs officials will face challenges implementing the executive order, particularly with the different tariff rates now applied across the world.
The seven-day grace period before implementation will be beneficial, but importers should anticipate at least some initial issues. As they navigate this new tariff landscape, US businesses will also encounter difficulties. Of particular concern is the continued uncertainties they will face with new sectoral tariffs coming and possibilities of additional tariffs if the Administration believes countries are not operating in good faith in their implementation efforts,” she said.
In the executive order, Trump stated that some trading partners have agreed to, or are on the verge of agreeing to, meaningful trade and security commitments with the US, thus signaling their sincere intentions to permanently remedy trade barriers and align with Washington on economic and national security matters.
He stated, "Other trading partners, despite having engaged in negotiations, have offered terms that, in my judgment, do not sufficiently address imbalances in our trading relationship or have failed to align sufficiently with the United States on economic and national-security matters." Additionally, "Other trading partners" have failed to adequately align with the United States. "Goods of those trading partners will remain subject to the additional ad valorem duties… until such time as those agreements are concluded, and I issue subsequent orders memorializing the terms of those agreements.” The tariff modifications shall be “effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time 7 days after the date of this order.” The tariffs in the list range from 10 per cent to 40 per cent, with Japan being charged 15 per cent, Laos and Myanmar (40 per cent each), Pakistan (19 per cent), Sri Lanka (20 per cent) and the United Kingdom (10 per cent).
Trump stated, "India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any country," despite the fact that the United States has a significant trade deficit with India. "Also, they have always bought a vast majority of their military equipment from Russia, and are Russia's largest buyer of energy, along with China, at a time when everyone wants Russia to stop the killing in Ukraine — All things not good!” Trump said.
He said that India will therefore be paying a tariff of 25 per cent, plus a penalty for the above, starting on August 1.
In addition, Trump slammed India and Russia for their close ties, claiming that the two nations could bring their "dead economies down together." "Whatever India does with Russia, I don't care. They can take their dead economies down together, for all I care," he said.
He continued, "We have done very little business with India because their tariffs are too high, some of the highest in the world." "Likewise, Russia and the USA do almost no business together. Let's keep it that way, and tell Medvedev, the failed former President of Russia, who thinks he's still President, to watch his words. He's entering very dangerous territory!” Trump said, referring to Dmitry Medvedev, the former president of Russia. India stated in its response that it is investigating the repercussions of the tariffs and that it will take all necessary measures to protect and advance the national interest. Trump also referred to India's membership in the BRICS (Brazil, Russia, India, China and South Africa) grouping, which he described as anti-US.
At an event in the White House Wednesday, Trump was asked what the additional penalty will be for India for its purchases from Russia.
"Well, we're negotiating right now, and it's also BRICS. Trump added, "It's an attack on the dollar, and we're not going to let anyone attack the dollar." "You know, they have BRICS, which is basically a group of countries that are anti-American, and India is a member of that, if you can believe it," he said. He had said the reason for tariffs on India is partially BRICS and partially the trade deficit.