Donald Trump has imposed 50 per cent tariffs on most United States imports from India, escalating a trade dispute over New Delhi’s purchases of discounted Russian crude.
The duties, which came into force just after midnight on Wednesday in Washington, are expected to deliver a heavy blow to the Indian economy and heap further strain on global supply chains.
Earlier this month, the White House raised tariffs on Indian goods to 25 per cent, but the US president announced plans to double the rate, accusing India of indirectly financing Russia’s war in Ukraine through its crude imports.
Since returning to the White House in January, Trump has sharply increased tariffs on a wide range of imports, unsettling allies and rivals alike and fuelling concerns of renewed inflationary pressure. The new measures place Indian exporters among those facing the steepest US duties, alongside Brazil.
Indian ministers have condemned the move, arguing the country has been unfairly singled out for its relationship with Moscow. Officials in New Delhi have cautioned the measures will push India to deepen ties with Russia and China, further complicating its relations with Washington.
Indian stock markets tumbled ahead of the tariff announcement, with the benchmark Sensex index falling by 1 per cent, or 849 points, to 80,876 in Mumbai on Tuesday.
Prime Minister Narendra Modi responded defiantly, urging citizens to support local industries. “All of us should follow the mantra of buying only ‘Made in India’ goods,” he said. “Pressure on us may increase [from the tariffs], but we will bear it.”
External affairs minister S Jaishankar dismissed Washington’s demand to halt Russian oil imports as “unjustified and unreasonable”, pointing out that European nations conduct far more trade with Moscow. Analysts estimate India would need to replace around 42 per cent of its oil imports to meet US demands.
A senior Indian trade official said the political fallout may prove longer-lasting than the immediate economic shock. “Trump has blown it. The hard work between the two countries, which inherently did not trust each other but still managed to build a solid strategic relationship, is now at risk,” the official said. “It is going to take a long time to reboot, and it probably won’t happen until Trump is out.”
