The US President's shock assertion got here as a crew of US commerce negotiators is getting ready to go to India subsequent month for additional talks for the proposed bilateral commerce settlement (BTA), the primary a part of which is to be concluded by October.
He blasted India's purchases from Russia, switching case halfway to amplify the message.
“They've at all times purchased a overwhelming majority of their army gear from Russia, and are Russia's largest purchaser of power, together with China, at a time when everybody desires Russia to cease the killing in Ukraine — All issues not good! India will due to this fact be paying a tariff of 25%, plus a penalty for the above, beginning on August first,” he posted on Reality Social. Later within the day, Trump stated the US was negotiating with India.
“They've one of many highest tariffs on the planet now, they're keen to chop it very considerably. However we'll see what occurs… You'll know by the tip of this week,” Trump advised reporters.
India asserted in a press release that the federal government will “take all steps essential to safe our nationwide curiosity, as has been the case with different commerce agreements, together with the most recent Complete Financial and Commerce Settlement with the UK.”
The Indian assertion was issued after a high-level assembly, convened quickly after Trump issued his assertion. The assembly was attended by prime authorities officers, together with commerce and business minister Piyush Goyal and exterior affairs minister S Jaishankar.
The punitive obligation may considerably dent India's items exports of $85 billion to the US, economists stated.
India and the US have been engaged in negotiations on concluding a good, balanced and mutually useful bilateral commerce settlement over the previous few months and “we stay dedicated to that goal,” the federal government assertion learn.
“The federal government attaches the utmost significance to defending and selling the welfare of our farmers, entrepreneurs and MSMEs.”
Trump, describing India as a “good friend,” stated the US has performed comparatively “little enterprise” with the nation due to its excessive tariffs. “Their tariffs are far too excessive, among the many highest on the planet, and so they have probably the most strenuous and obnoxious non-monetary commerce limitations of any nation,” Trump stated within the put up.
His announcement comes forward of the August 1deadline he set for imposing reciprocal tariffs, which had been paused for 90 days, on many buying and selling companions.
Twists and turns
India has hardened its place on the US demand for obligation concessions on agricultural and dairy merchandise. It has not given any obligation concessions within the dairy sector in any free commerce settlement.
An individual aware of the matter stated Trump's assertion was a stress tactic to safe deeper concessions. The Indian and US groups concluded the fifth spherical of talks on the settlement final week in Washington.
A bilateral commerce settlement (BTA) is beneath negotiation, introduced by Prime Minister Narendra Modi and Trump in February, to greater than double bilateral commerce to $500 billion by 2030.
Influence
India's shrimp, textiles, gems and jewelry, toys and engineering exports could possibly be probably the most hit by the upper tariffs, because the US accounts for about 18% of India's whole items exports.
The US is the most important marketplace for the home shrimp business. Ecuador and Indonesia are main rivals for the US market. India's whole items exports to the US had been $86.5 billion in FY25. New Delhi's exports in key sectors corresponding to gems and jewelry, and attire are additionally prone to be hit by the extra tariffs.
Ficci president Harsha Vardhan Agarwal stated the foyer group “is upset by the choice taken by the US to levy a 25% tariff on exports from India and impose secondary sanctions.” Agarwal stated the transfer was unlucky and can have a bearing on India's exports. “We hope this imposition of upper tariffs will likely be a short-term phenomenon and {that a} everlasting commerce deal between the 2 sides will likely be finalised quickly,” he stated.
