Trump’s 25% Tariff on India Enforced; Additional 25% Duty Announced

A 25 percent tariff on Indian exports to the US took effect on August 7, 2025, marking a major escalation in trade tensions. With the US President warning of a second round of tariffs set to begin on August 27—unless a trade deal is finalized—India-US bilateral relations face heightened uncertainty in the coming weeks.

Effective August 7, 2025, a 25 percent tariff on Indian exports to the United States (US) has officially come into force, as per the revised trade measures announced by President Donald J. Trump. This action follows an executive order issued on July 30, 2025, targeting nearly 70 countries under a new tariff framework.

India is among several nations impacted by what the US administration refers to as “reciprocal” tariffs, aimed at countering trade practices that Washington considers discriminatory or unfair to American interests.

Trump’s justification for tariff escalation

The US tariff hike in 2025 represents a continuation of Trump’s broader agenda to reorient global trade policies in favor of domestic economic interests during his second term in the White House.

Taking to his social media platform, Truth Social, Trump marked the enforcement deadline with a post:

“IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!”

Trump has emphasized that the revised tariff regime would bring in substantial revenues from countries that he believes have long benefitted from the US economy. He also suggested that only judicial opposition could hinder America’s economic resurgence.

Additional US tariffs imposed on India on August 6

In a separate executive action on August 6, 2025, Trump announced an additional 25 percent tariff on Indian exports, citing India’s continued import of crude oil from Russia. This new measure raises the total tariff burden on Indian goods to 50 percent—among the highest rates currently imposed by the US on any trading partner.

The executive order specifies that the additional ad valorem duty will apply to goods entered for consumption on or after 12:01 a.m. EDT, 21 days from the date of the order. Exceptions will be made for goods already in transit and cleared before September 17, 2025.

The imposition of additional US tariffs on Indian exports—now totaling 50 percent—has intensified pressure on Indian trade competitiveness. Many of India’s export rivals, including Vietnam, Bangladesh, and China, continue to benefit from lower duty rates, placing Indian exporters at a distinct disadvantage.

Source: India Briefing

As per reports, Indian exporters have already begun feeling the impact, citing growing uncertainty and disruption in trade flows. Nearly 50 percent of the US$80 billion in annual exports from India to the US fall under the exemption list covering key items like pharmaceuticals and electronics. However, the remaining half of the exports is now subject to the steep tariff.

India-US tariff conflict: Exporters raise alarm over cost pressures

Indian exporters have voiced strong concern over the tariff escalation, warning of severe consequences for industry margins and long-standing trade relationships.

The Federation of Indian Export Organisations (FIEO) has described the development as a “serious setback” for Indian exports. FIEO has also expressed concerns about tariff repercussions hitting India’s micro, small, and medium enterprises (MSMEs). The export body notes that approximately 55 percent of shipments to the US are now affected, placing exporters at a 30–35 percent cost disadvantage compared to countries with lower tariffs.

Similarly, the chairman of the Confederation of Indian Textile Industry (CITI) warned that the August 6 tariff hike could further weaken India’s textile and apparel sector, which is already navigating a challenging environment.

The CITI chairman has reportedly urged the central government to intervene swiftly and support the sector’s global competitiveness in line with its broader objective of positioning India as a major player in global value chains.

Bilateral, trade setback for India-US amid ongoing tariff dispute

Media reports, citing industry experts, have indicated that the US is currently unwilling to engage in sector-specific tariff negotiations, particularly in areas like steel and automobiles—industries that have already suffered losses exceeding US$5 billion in export value.

Industry experts have warned that the latest trade actions could strain diplomatic relations.

India’s strategic options for tariff recalibration

After the US tariff rate unveiling, first announced on April 2, 2025, India was initially expected to be among the first to reach a trade agreement with the Trump administration by the end of the first tariff pause. However, talks stalled after five rounds, largely due to disagreements over market access for US agricultural and dairy products and India’s oil purchases from Russia.

Indian officials remain cautiously optimistic that ongoing closed-door discussions could help de-escalate tensions between the two countries. A US trade delegation is expected in New Delhi later in August 2025 to explore solutions.

India’s Prime Minister Narendra Modi has reiterated India’s stance on protecting key domestic sectors and safeguarding the interests of farmers, dairy producers, and fisherfolk. 

India strengthening ties with developing economies

India is expected to leverage its position within global blocs like BRICS to counterbalance pressure from the US. Brazil, another key target of the US tariffs, has expressed plans to initiate joint discussions with fellow BRICS members, including India, China, Russia, and South Africa.

According to media reports citing central government sources, India is actively seeking to rebuild and diversify its international alliances and trade deals. On July 24, 2025, Prime Ministers of India and the UK signed the much-anticipated Free Trade Agreement (FTA). This is India’s first major FTA in over a decade and the UK’s fourth since its exit from the EU in 2020.

READ MORE: India’s FTA Network: Updates in 2025

Conclusion

The sudden escalation of US tariffs presents India with a complex trade and geopolitical challenge. While diplomatic channels remain open, the economic pressure on Indian exporters—especially MSMEs—is mounting. New Delhi faces a difficult balancing act: defending strategic sectors, sustaining economic ties with Washington, and strengthening multilateral partnerships with emerging economies.

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