US president Donald Trump on Wednesday announced that India will have to pay 25 per cent tariff from August 1. Trump also said that India will have to pay an additional penalty for buying energy and arms from Russia. The 25% tariff rate announced for India is 1% less than the 26% declared by Trump in his April 2 'Liberation Day' conference.
"Remember, while 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," Trump said in a post on Truth Social.
"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! India will therefore be paying a tariff of 25%, plus a penalty for the above, starting on august first. Thank you for your attention to this matter. maga!" he said.
Meanwhile, Trump's reciprocal tariffs for countries will be effective August 1, 2025, without any further delays, Commerce Secretary Howard Lutnick has said. Lutnick has said that fresh tariffs would take effect on August 1 for the targeted nations. "So no extensions, no more grace periods. August 1, the tariffs are set. They'll go into place. Customs will start collecting the money, and off we go," Lutnick has said.
India-US Trade Deal Stalemate
Despite announcing the intent for a bilateral trade agreement during PM Narendra Modi's visit to the US, the two countries have not been able to work out an interim trade deal. Five rounds of talks have taken place between officials of the two countries and a sixth round is slated to take place in August end when a US team will visit India.
Yesterday Trump had hinted that India could face tariffs between 20-25% since a trade deal had not been finalized. According to a Reuters report, Indian government officials have said that any tariffs the US may impose from August 1 are likely to be temporary in nature since talks are on to finalise a bilateral trade agreement by fall.
Trump has repeatedly called for India to open its market to US goods, but the sticky points in the trade deal talks have been agriculture and dairy sectors. India has hardened its stance on these, refusing to open them.
MSK/
