The 50 per cent United States tariff on India in 2025

Trade between India and the United States is among India's most important external economic relationships, with the United States as one of India's largest export markets. In 2025, that relationship was strained by two separate tariff actions. The first, announced in April 2025, imposed a 25 per cent reciprocal tariff on Indian goods. The second, imposed as a penalty for India's purchases of Russian oil, added a further 25 per cent, taking the total additional tariff to 50 per cent for many goods.

On 6 August 2025, United States President Donald Trump signed an executive order titled Addressing Threats to the United States by the Government of the Russian Federation, imposing an additional 25 per cent ad valorem duty on certain imports from India, on the ground that India was directly or indirectly importing Russian oil. The additional duty took effect on 27 August 2025, with exceptions for goods already in transit and for certain categories, including pharmaceuticals, energy products, critical minerals, and many electronics and semiconductors.

The sectors most exposed, according to contemporary reporting, included textiles and clothing, gems and jewellery, shrimp and marine products, leather and footwear, chemicals, and electrical and mechanical machinery. Those are labour-intensive sectors in which Indian exporters compete on price, and in which a 50 per cent tariff can quickly make an order unviable. Exporters reported cancelled or deferred orders, pressure to absorb part of the tariff, and a search for alternative markets, while the Indian government argued that India's energy purchases were driven by the need for affordable supplies and by national interest.

The tariff episode also illustrated how trade policy can be used as a foreign policy tool. The additional duty was not presented as a response to India's own trade barriers alone, but as a penalty for a third-country relationship, namely India's energy trade with Russia. That linkage drew criticism in India, where commentators noted that other buyers of Russian oil, including China and Turkey, did not face the same additional penalty at that time, while the United States argued that its measures were aimed at reducing Russia's revenue from the war in Ukraine.

In February 2026, after further negotiations, the United States and India agreed to reduce the tariff, with the reciprocal tariff falling from 25 per cent to 18 per cent and the additional Russian-oil penalty withdrawn, according to contemporary reporting, after India committed to curbing Russian oil purchases and expanding energy and defence cooperation. The 50 per cent rate therefore lasted about six months, but its effect on exporters, supply chains, and trade negotiations continued beyond that period.