The recent imposition of steep tariffs by US President Donald Trump, accompanied by his acerbic remarks branding India and Russia as “dead economies,” has raised significant concerns within international diplomatic circles. In a sharp escalation of trade pressure, Trump signed an executive order on August 7, imposing an additional 25 per cent ad valorem duty on a broad spectrum of Indian exports, citing India’s continued importation of Russian oil in defiance of US sanctions. He described the measure as a punitive response to India’s role in “fuelling Russia’s war machine.”
This new tariff, set to take effect on August 27, 2025, targets key sectors including textiles, automobiles, and jewellery, on the heels of an earlier 25 per cent tariff. Notably, Trump’s order exempts pharmaceuticals and semiconductors under Section 232 of the Trade Expansion Act of 1962, and excludes goods already in transit prior to the deadline.
“I find that the Government of India is currently directly or indirectly importing oil from the Russian Federation,” the executive order states. The decision, enacted under the authority of the International Emergency Economic Powers Act and the National Emergencies Act, is widely seen as a continuation of Trump’s uncompromising “America First” trade strategy.
India’s Ministry of External Affairs swiftly condemned the newly imposed tariffs as “unfair, unjustified, and unreasonable,” accusing the United States of applying double standards. The ministry pointed out that other nations importing Russian oil have not faced similar punitive measures. The timing and tone of Trump’s remarks have cast a shadow over the steadily strengthening ties between Washington and New Delhi, injecting uncertainty into what had been a mutually strategic and increasingly cooperative partnership.
In a move that further complicated the geopolitical landscape, Trump simultaneously announced a new energy partnership with Pakistan. Under this agreement, Pakistan was granted a preferential tariff rate of 19 per cent and invited to collaborate on the development of its “massive oil reserves.” The contrast was striking. India, maintaining diplomatic restraint, chose not to respond to Trump’s suggestion that Pakistan could eventually sell oil to India, a proposal viewed by many as a signal of shifting strategic priorities in South Asia.
In fact a report by the Global Trade Research Initiative (GTRI) challenged the rationale behind Trump’s selective targeting of India as it states that China was the largest importer of Russian oil in 2024, purchasing $62.6 billion worth, significantly more than India’s $52.7 billion. Yet Trump’s criticism has conspicuously avoided China, a choice the report attributes to geopolitical calculations. GTRI also refuted Trump’s claim on Truth Social that India is “buying massive amounts of Russian oil and selling it on the open market for big profits,” clarifying that India does not export crude oil at all. Instead, it imports crude, and exports refined petroleum products such as diesel and jet fuel, a standard practice among energy-importing nations.
Beyond its questionable rationale, the timing of Trump’s unexpectedly harsh rhetoric appears to reflect mounting frustration over the ongoing conflict in Ukraine. His failure to deliver on promises of securing a ceasefire within 24 hours of taking office has seemingly prompted a series of economic retaliations aimed in multiple directions.
It is worth noting that, although Russia remains the dominant supplier, India’s imports of US crude and liquefied natural gas have steadily increased. In 2025, US crude imports averaged 271,000 barrels per day, up from 180,000 in 2024. Yet US volumes, while growing, are still insufficient to replace Russia’s supply due to differences in scale and composition. India’s energy ties with the US continue to evolve, and analysts project further growth, with imports potentially reaching 300,000 barrels per day. So buying Russian oil may not be the only reason for Trump to announce additional tariffs.
Trump’s tariff-centric diplomacy seems driven more by ire than by measured policy. A similar pattern has emerged with America’s other key allies. Despite the UK’s long-standing “special relationship” with the US, Trump enforced tough concessions before reducing British tariffs to 10%. Japan and the EU saw theirs trimmed to 15%, underscoring the former president’s transactional approach to geopolitics. India’s economy could take a 0.5–0.6% hit to gross domestic product (GDP) due to the additional 25% tariffs imposed by the US.
India has recently inked free trade agreements with a diverse array of partners, including the UAE, Mauritius, Australia, EFTA, and the United Kingdom. These strategic alliances could serve as a vital buffer, mitigating much of the potential disruption posed by Trump's tariff measures. Importantly, Trump’s executive order leaves room for revision. Its provisions may be adjusted depending on India’s response, whether through retaliatory trade measures or through steps that align more closely with US strategic interests.
Meanwhile, India continues to deepen its economic ties with Russia, recently signing a protocol to enhance cooperation in sectors such as aluminium, fertilisers, railways, and mining technology. Negotiations with the US on a Bilateral Trade Agreement (BTA) have been underway since March 2025, with the sixth round of talks scheduled for August 25. These discussions carry added weight in light of the newly imposed 50 per cent tariffs on Indian goods. India has formally appealed for a rollback of the tariff and broader reductions on existing duties, 50 per cent on steel and aluminium, and 25 per cent on auto exports. Under WTO provisions, New Delhi retains the right to impose retaliatory measures against unilateral trade actions.
Rather than reacting to political optics from the West, India must remain focused on its long-term economic priorities. With some time remaining before the proposed 50 per cent duties take effect, India has an opportunity to navigate this challenge strategically. The US tariff announcement should be viewed as part of a broader negotiation strategy rather than a cause for immediate alarm.
With the 15-day countdown to 50 per cent tariffs now underway, global markets and diplomatic stakeholders are closely monitoring the situation. Meanwhile, reports have surfaced of a potential meeting between the US and Russian presidents. Whether this engagement can yield a ceasefire in Ukraine, and prompt a reconsideration of the newly imposed tariffs, remains to be seen.
The author is a strategic and economic affairs analyst.