Trump has issued a warning of imposing 50% tariffs on India due to its purchase of Russian oil

US President Donald Trump has signed an executive order imposing an extra 25% tariff on India's imports of Russian oil.

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This will increase the overall tariff on Indian imports to the United States to 50%, marking one of the highest rates enforced by the US. The new tariff rate is set to take effect in 21 days, specifically on 27 August, as stated in the executive order. In response, India's foreign ministry issued a statement on Wednesday, emphasizing that Delhi has already articulated its position regarding imports from Russia, and reiterated that the tariff is deemed "unfair, unjustified, and unreasonable".

The brief statement expressed, "It is therefore extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest." It further stated, "India will take all actions necessary to protect its national interests." Earlier, the US president had cautioned that he would increase levies, asserting that India does not "care how many people in Ukraine are being killed by the Russian War Machine". On Wednesday, the White House released a statement indicating that the "Russian Federation's actions in Ukraine pose an ongoing threat to US national security and foreign policy, necessitating stronger measures to address the national emergency".

The statement noted that India's imports of Russian oil undermine US efforts to counteract Russia's actions in Ukraine. It also mentioned that the US will identify which other nations import oil from Russia and will "recommend further actions to the President as needed". Oil and gas represent Russia's largest exports, with its primary customers including China, India, and Turkey. The proposed tariff increase follows discussions held on Wednesday by Trump's chief envoy, Steve Witkoff, in Moscow, aimed at achieving peace between Russia and Ukraine. The additional tariff would impose a significant 50% duty on crucial Indian exports such as textiles, gems and jewelry, auto parts, and seafood, impacting major sectors that create jobs.

Electronics, such as iPhones, and pharmaceuticals are currently exempt. Delhi has previously described Trump's threat to increase tariffs on its oil purchases from Russia as "unjustified and unreasonable." In a prior statement, a representative from India's foreign ministry indicated that the US had urged India to import Russian gas at the onset of the conflict, "to enhance the stability of global energy markets." He noted that India "initiated imports from Russia due to the diversion of traditional supplies to Europe following the conflict's outbreak." 

The most recent threatened tariff illustrates Trump's readiness to impose sanctions related to the Ukraine war, even against nations that the US regards as significant allies or trading partners. This may serve as a warning that other countries could experience substantial repercussions if Trump escalates such sanctions after Friday's deadline, when the US president has threatened new sanctions on Russia and the imposition of 100% tariffs on countries purchasing its oil. This would not mark the first instance of the Trump administration implementing secondary tariffs, which are also aimed at penalizing buyers of Venezuelan oil. 

India has previously criticized the US - its largest trading partner - for enacting these levies, especially when the US continues to engage in trade with Russia. Last year, the US conducted trade worth an estimated $3.5 billion (£2.6 billion) with Russia, despite stringent sanctions and tariffs. Trump and Indian Prime Minister Narendra Modi have historically referred to one another as friends and, during Trump's initial term, participated in political rallies in each other's nations.

However, this has not deterred Trump from imposing levies on India, indicating a divergence of interests between New Delhi and Washington. The Federation of Indian Export Organisations has described the decision to implement additional tariffs as "extremely shocking," noting that it will affect 55% of India's exports to the United States. These tariffs are anticipated to significantly increase the cost of Indian goods in the US market, potentially reducing exports bound for the US by 40–50%, as per the Global Trade Research Initiative (GTRI), a think tank based in Delhi. "India should maintain composure, refrain from retaliation for at least six months, and understand that substantial trade negotiations with the US cannot advance amidst threats or distrust," stated Ajay Srivastava, a former Indian trade official and head of GTRI.