The White House has announced an additional 25 per cent tariff on all Indian imports, bringing total levies against the South Asian nation to an unprecedented 50 per cent, as President Donald Trump intensifies his campaign to punish countries buying Russian oil.
In an executive order issued Wednesday, Trump declared: “I find that the Government of India is currently directly or indirectly importing Russian Federation oil,” citing this as justification for the dramatic escalation in trade penalties against one of America’s largest trading partners.
The new tariffs, set to take effect in 21 days, come on top of previously announced 25 per cent duties scheduled to begin Thursday, creating what economists describe as one of the highest tariff walls imposed by the United States on any major trading partner.
“Accordingly, and as consistent with applicable law, articles of India imported into the customs territory of the United States shall be subject to an additional ad valorem rate of duty of 25 percent,” the executive order states.
The move represents Trump’s most aggressive trade action yet in his effort to economically isolate Russia over its ongoing invasion of Ukraine, with India becoming the primary target due to its position as Russia’s largest oil customer by volume.
Speaking on CNBC’s “Squawk Box” Tuesday, Trump had telegraphed the dramatic escalation, warning he would raise tariffs on India “very substantially over the next 24 hours, because they’re buying Russian oil, they’re fuelling the war machine.
And if they’re going to do that, then I’m not going to be happy,” the President declared, signalling his determination to use America’s economic leverage to pressure third countries over their Russia ties.
India has emerged as the biggest purchaser of Russian crude oil by volume since Moscow’s full-scale invasion of Ukraine in February 2022, with more than a third of its oil imports now coming from Russia, according to data from the Centre for Research on Energy and Clean Air.
The dramatic tariff increase fulfils Trump’s threat from last week when he announced India would face both a 25 per cent tariff and an additional “penalty” over its purchases of Russian military equipment and energy. Wednesday’s executive order clarifies that the penalty takes the form of doubling the tariff rate to 50 per cent.
India’s Ministry of External Affairs pushed back forcefully against the measures, declaring in a Monday statement that the country is being “targeted” by the US and European Union “for importing oil from Russia after the commencement of the Ukraine conflict.
It is revealing that the very nations criticising India are themselves indulging in trade with Russia,” the ministry stated, pointing to what it called double standards in Western policy.
The Indian government highlighted that “unlike our case, such trade is not even a vital national compulsion” for Western nations, underscoring India’s dependence on affordable energy imports to meet its massive domestic needs.
India’s petroleum minister, Hardeep Singh Puri, had previously defended the oil purchases, noting in recent interviews that India was actually encouraged by the United States to buy Russian oil to help stabilise global energy markets following the invasion.
“If people or countries had stopped buying at that stage, the price of oil would have gone up to 130 dollars a barrel,” Puri explained. We were advised, including by our friends in the United States, to please buy Russian oil, but within the price cap.
Former US ambassador to India Eric Garcetti appeared to confirm this narrative last year, stating at a conference that India purchased Russian oil as “we wanted somebody to buy Russian oil” to prevent market chaos.
The 50 per cent tariff rate places India among the highest-taxed US trading partners, exceeding even the duties imposed on China, which currently faces a 30 per cent rate (comprising a 10 per cent baseline plus 20 per cent for fentanyl-related concerns).
Trade experts warn the measures could severely disrupt bilateral commerce between the world’s largest democracy and its most populous nation. The US ran a £35.4 billion ($45.8 billion) trade deficit with India last year, importing far more than it exported.
The escalation comes despite monthslong efforts by Indian officials to secure a trade deal with the Trump administration. Sources close to the negotiations indicated that Indian diplomats believed on several occasions they were nearing agreement, making Wednesday’s announcement a significant diplomatic setback.
Trump’s action forms part of a broader strategy to economically pressure countries maintaining trade relationships with Russia. Earlier this month, he threatened that nations purchasing Russian oil would face “secondary sanctions” if Moscow fails to agree to a Ukraine ceasefire within 50 days.
A bipartisan group of US senators has been pushing for even more severe measures, backing legislation that would authorise tariffs of up to 500 per cent on countries buying Russian energy, natural gas, uranium and other exports – what supporters call the “sledgehammer” needed to end the war.
Treasury Secretary Scott Bessent had warned trading partners at recent international meetings: “I think anyone who buys sanctioned Russian oil should be ready for this,” signalling the administration’s determination to enforce its Russia policy through trade measures.
The Kremlin swiftly denounced the US action, with spokesman Dmitry Peskov telling reporters Tuesday: “We do not consider such statements legal. We believe that sovereign countries should have – and do have – the right to choose their own trading partners.”
For India, the tariffs create what economists describe as an “impossible choice” between maintaining access to discounted Russian energy crucial for its economy and preserving its vital trade relationship with the United States.
Matt Gertken, chief geopolitical strategist at BCA Research, suggested India might seek workarounds through Russia’s “shadow fleet” of tankers – third-party intermediaries that deliver oil whilst obscuring its origin.
“After the initial statements of defiance, there will be business interests in India that would say, ‘well, wouldn’t it be better if we partly enforce these sanctions, got reprieve from the US and negotiated a trade deal,'” Gertken predicted.
The timing of Trump’s announcement appears calculated to maximise pressure, coming just as Indian officials had indicated optimism about reaching a broader trade agreement with Washington that would have reduced existing tariffs and expanded market access.
Adding insult to injury, Trump announced earlier this week that the US had reached a trade framework agreement with Pakistan, India’s regional rival, including provisions for developing Pakistan’s oil reserves with American companies.
“Who knows, maybe they’ll be selling oil to India some day!” Trump wrote on Truth Social, in what observers interpreted as a deliberate provocation.
The 21-day implementation period provides a narrow window for potential negotiations, though the severity of Trump’s rhetoric and the scale of the tariff increase suggest limited room for compromise without significant Indian concessions on Russian oil purchases.
A Treasury spokesman declined to provide additional details about enforcement mechanisms or potential exemptions, stating only that the administration remains committed to “ending Russia’s ability to fund its war machine through energy exports.
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