U.S. President Donald Trump on Wednesday (August 6, 2025) signed an executive order imposing an additional 25% tariff on imports from India, in response to India “directly or indirectly” importing oil from Russia. This is over and above the 25% tariff on Indian imports that Mr. Trump approved on July 31.

While the initial 25% tariff will come into effect from Thursday (August 7, 2025), the additional 25% tariff will come into effect after 21 days.

The Ministry of External Affairs (MEA) responded to these latest developments, saying it has made its stand clear — through an earlier statement following Mr. Trump’s threat of additional tariffs — that these actions were “unfair, unjustified and unreasonable”. It was “extremely unfortunate” that the U.S. has chosen this course of action, the MEA said.

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‘Penalty’ for Russian oil imports

“To deal with the national emergency described in Executive Order 14066 [relating to Russia’s actions in Ukraine], I determine that it is necessary and appropriate to impose an additional ad valorem duty on imports of articles of India, which is directly or indirectly importing Russian Federation oil,” Mr. Trump’s executive order said. 

“Accordingly, and as consistent with applicable law, articles of India imported into the customs territory of the United States shall be subject to an additional ad valorem rate of duty of 25%,” it added.

Over the last few days, Mr. Trump has repeatedly threatened additional tariffs on India as a “penalty” for its oil imports from Russia.

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‘Unfair, unjustified, unreasonable’

In response to one such threat, the MEA on August 4 pointed out that, not only did the U.S. encourage such trade previously, both the European Union and the U.S. actively trade other items with Russia in excess of the amount that India pays for Russian oil.

“We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India,” the MEA statement said. “It is therefore extremely unfortunate that the U.S. should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest.”

“We reiterate that these actions are unfair, unjustified and unreasonable,” the MEA added. “India will take all actions necessary to protect its national interests.”

‘Competitive disadvantage’

This latest escalation by Mr. Trump is a “severe setback” for Indian exports, said S.C. Ralhan, president of the Federation of Indian Export Organisations, noting that nearly 55% of Indian exports to the U.S. market will be directly affected. 

“The 50% reciprocal tariff effectively imposes a cost burden, placing our exporters at a 30% to 35% competitive disadvantage compared to peers from countries with a lower reciprocal tariff,” Mr. Ralhan added.

Negotiators from the U.S. and India are currently engaged in finalising the first tranche of a Bilateral Trade Agreement (BTA) by fall of this year. The next physical meeting between the two sides is expected to start on August 25 in New Delhi. 

‘Talks hampered by threats’

“India should remain calm, avoid retaliation for at least six months, and recognise that meaningful trade negotiations with the U.S. cannot proceed under threats or mistrust,” said Ajay Srivastava, founder of the Global Trade Research Initiative and a former Director General of Foreign Trade.

He added that India could consider stopping its purchases of Russian oil only if it was economically viable, and not under duress from Washington.

The announcements by U.S. President Donald Trump and the White House regarding trade deals with Japan and details of the deal with Indonesia on Tuesday (July 22, 2025) will have significant implications and lessons for a potential trade deal with India, according to officials and trade experts.

Mr. Trump on Tuesday (July 22, 2025) announced that the U.S. had completed a “massive deal” with Japan. Simultaneously, the White House also released the framework for the deal with Indonesia, which had been announced last week.

According to Mr. Trump, Japan has agreed to invest $550 billion in the U.S. under the deal, which would create “hundreds of thousands” of jobs in the U.S. Also, Japanese imports into the U.S. will face a 15% tariff, down from the proposed 25%.

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Under the deal, Japan has also agreed to import a larger share of rice from the U.S. under its tariff-free quota. According to a World Trade Organisation (WTO) minimum access framework agreement signed in 1995, Japan imports about 7,70,000 metric tons of tariff-free rice every year. According to some reports, the U.S. accounted for 45% of the total in the last financial year. This share could now increase.

According to Mr. Trump, Japan will open several sectors to U.S. imports, including cars, trucks, and agricultural products. The Hindu has previously reported how agriculture remains a major impediment in the ongoing negotiations for a trade deal between India and the U.S.

“India is of course monitoring all the deals that are being struck with the U.S., but it’s also important to remember that these are deals so far in words and have not been officially signed yet,” according to a source.

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“But it is significant that agriculture entered the U.S. deal with Japan,” he added. “It is important to examine the ring-fencing of rice imports that Japan has ensured.”

Following Mr. Trump’s announcement, Japanese Prime Minister Shigeru Ishiba was quoted by Reuters as telling reporters that “import volumes (of rice) will remain within the minimum access framework and we retain the discretion over how much and what type to import from each country”.

The framework for the trade deal with Indonesia reveals that that country would remove tariffs on about 99% of items industrial, food and agricultural items imported from the U.S. In addition, the framework also includes several upcoming acquisitions by Indonesia of products from the U.S.

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These include aircraft worth $3.2 billion, agriculture products, including soybeans, soybeans meal, wheat and cotton worth $4.5 billion and energy products, including liquefied petroleum gas, crude oil and gasoline, worth $15 billion.

The U.S. will impose a 19% tariff on Indonesia, down from the 32% he had said would be imposed from August 1. The U.S.–Indonesia trade deal forces Jakarta to give up key domestic regulations that have long protected its industries, food safety and digital space.

“The U.S.–Indonesia trade deal is a clear example of how aggressive U.S. pressure can force countries to slash tariffs, commit to large purchases, and give up control over their own regulations,” Ajay Srivastava, former Director General of Foreign Trade and founder of Global Trade Research Initiative said. “India must be careful not to fall into the same trap.”