Trump slaps additional 25 per cent tariff on Indian imports over Russian oil purchases

Washington [US] : US President Donald Trump signed an Executive Order on Wednesday imposing an additional 25 per cent tariff on imports from India in response to New Delhi's purchase of Russian oil.

According to the order issued by the White House, Trump cited matters of national security and foreign policy concerns, as well as other relevant trade laws, for the increase, claiming that India's imports of Russian oil, directly or indirectly, pose an "unusual and extraordinary threat" to the United States.

After the order, the total tariff on Indian goods will be 50 per cent. While the initial duty becomes effective on August 7, the additional levy will come into effect after 21 days and will be imposed on all Indian goods imported into the US, except for goods already in transit or those meeting specific exemptions.

The Executive Order also allows for modifications based on changing circumstances, including potential retaliation by other countries or steps taken by Russia or India to address the national emergency.

"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 per cent," the order stated.

"This rate of duty shall be effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time 21 days after the date of this order, except for goods that (1) were loaded onto a vessel at the port of loading and in transit on the final mode of transit prior to entry into the United States before 12:01 a.m. eastern daylight time 21 days after the date of this order," the order added.

Earlier on Tuesday, Trump, hours after he mentioned raising tariffs on India, said he would increase the tariff charged on imports from India from the current rate of 25 per cent "very substantially" over the next 24 hours due to New Delhi's continued purchases of Russian oil, Reuters reported.

"They're fuelling the war machine, and if they're going to do that, then I'm not going to be happy," Trump told CNBC in an interview, as cited by Reuters.

According to the report, he added that the main sticking point with India was that its tariffs were too high but did not provide a new tariff rate.

Trump had said on Monday that the United States will "substantially raise" the tariff paid by India for buying "massive amounts of Russian Oil", stating that much of the oil purchased from Moscow is being sold in the open market "for big profits".

Trump's announcement, made on his social media platform Truth Social, came days after he announced a 25 per cent reciprocal tariff on India and an unspecified penalty for importing oil from Russia.

"India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don't care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA. Thank you for your attention to this matter!!!" the US President said in the post.

Soon after the US President's remark, India said that "the targeting of India is unjustified and unreasonable".

A statement by the official spokesperson of the Ministry of External Affairs said that the government will take all necessary measures to safeguard its national interests and economic security.

The spokesperson said that India has been targeted by the United States and the European Union for importing oil from Russia after the commencement of the Ukraine conflict.

"In fact, India began importing from Russia because traditional supplies were diverted to Europe after the outbreak of the conflict. The United States at that time actively encouraged such imports by India for strengthening global energy markets stability. India's imports are meant to ensure predictable and affordable energy costs to the Indian consumer. They are a necessity compelled by global market situation. However, it is revealing that the very nations criticizing India are themselves indulging in trade with Russia. Unlike our case, such trade is not even a vital national compulsion," the statement noted.

MEA spokesperson said that the European Union in 2024 had a bilateral trade of Euro 67.5 billion in goods with Russia. In addition, it had trade in services estimated at Euro 17.2 billion in 2023."This is significantly more than India's total trade with Russia that year or subsequently. European imports of LNG in 2024 reached a record 16.5 million tonnes, surpassing the last record of 15.21 million tonnes in 2022.

"The spokesperson said that Europe-Russia trade includes not just energy, but also fertilisers, mining products, chemicals, iron and steel and machinery and transport equipment.

"Where the United States is concerned, it continues to import from Russia uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilisers, as well as chemicals. In this background, the targeting of India is unjustified and unreasonable. Like any major economy, India will take all necessary measures to safeguard its national interests and economic security," the statement said.

India has, earlier too, defended its sovereign right to conduct energy policy based on national interest.

The government had clarified that market dynamics and national interests guide India's energy purchases. "You are aware of our broad approach to energy sourcing requirements, which looks at what is available in the market and the prevailing global situation. We are not aware of any specifics," MEA Spokesperson Randhir Jaiswal said last week, answering queries on Trump's announcement of a penalty for purchasing Russian oil.

Answering another query, Jaiswal said India's relations with any country are based on their own merit and shouldn't be viewed through the lens of third countries."Our ties with any country stand on their merit and should not be seen from the prism of a third country. As far as India-Russia relations are concerned, we have a steady and time-tested partnership," he added.

Answering a query on Friday, Trump indicated that if India stops buying Russian, it will be a good step.

Trump announced the imposition of 25 per cent tariffs on Indian goods and a penalty for importing Russian oil in the last week of July, even as there were hopes of an interim India-US trade that would have otherwise helped avoid elevated tariffs.

There are apprehensions that global crude prices could jump to USD 200 a barrel if India were to stop buying Russian oil, which will severely harm consumers.