US-India trade relations strained as tariffs double

August 27, 2025 (MLN): President Donald Trump has followed through on his threat to double tariffs on imports from India, raising them to 50% in a move that risks straining relations with one of America’s most important trading partners while driving up consumer prices.

The decision comes just weeks after Trump imposed a new 25% baseline tariff on Indian goods, placing levies on India the world’s fifth-largest economy among the highest the United States charges across all countries.

Trump has said the tariffs are intended to punish India for importing Russian oil and helping Moscow finance its war with Ukraine.

The U.S. president recently met separately with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy to try to broker an end to the war, but talks remain deadlocked.

American firms and consumers are already feeling the pinch of Trump’s wider tariff campaign, with costs rising and the labor market showing signs of strain, as CNN reported.

The increased duties on Indian products could further aggravate these effects.

New Delhi had signaled plans to retaliate earlier this month when Trump first vowed to impose what he described as “secondary sanctions.”

 India has accused Washington of unfairly singling it out, pointing to the fact that other importers of Russian oil such as China, the largest buyer are facing a lower minimum tariff of 30%.

Trump, however, has warned that other countries could also face higher duties.

The trade deficit between the United States and India has expanded over the past decade, even as imports in both directions roughly doubled.

Last year, the U.S. imported $87 billion worth of goods from India while exporting $42bn to the country, according to Commerce Department data.

India’s key exports to the U.S. include pharmaceuticals, communications equipment such as smartphones, and apparel.

Smartphones remain exempt from the “reciprocal” tariffs that now include the 50% levy.

Trump’s measures also apply across sectors, such as the 50% tariff on steel and aluminum products.

However, sectoral duties will not be stacked, meaning Indian steel and aluminum goods will face a flat 50% tariff rather than a combined 100%.

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