The United States has imposed sweeping 50% tariffs on Indian exports ranging from machinery components to textiles, effective Wednesday, escalating tensions over New Delhi's continued purchases of Russian oil. The move doubles existing duties and marks one of the highest tariff rates imposed by Washington on a major trading partner.
Energy Politics Drive Trade Tensions
Analysts view the tariffs as part of former President Donald Trump's broader strategy to pressure nations supporting Russia's economy amid the Ukraine conflict. India imported 36% of its crude oil from Russia in 2024, saving billions in energy costs while maintaining stable domestic fuel prices.
Selective Exemptions Reveal Complex Impacts
While pharmaceuticals, semiconductors, and smartphones remain exempt, smaller Indian manufacturers face existential threats. The U.S. imported $87.3 billion worth of Indian goods last year, making it New Delhi's largest export market.
India Vows Economic Resilience
Prime Minister Narendra Modi pledged to reduce citizens' tax burdens during a recent independence day address, stating: "We will defend our national interests through self-reliance." The government has condemned the tariffs as "unfair" and "unreasonable," while state-owned Indian Oil confirmed plans to continue purchasing Russian crude based on market conditions.
Trade experts warn the 50% duty could reshape global supply chains, with multinational corporations potentially relocating production from India to Southeast Asia. The Trump administration has signaled possible additional tariffs through ongoing sectoral investigations.
