In a dramatic escalation of trade tensions, President Donald Trump announced Wednesday that the U.S. will slap a combined 50% tariff on Indian imports, citing India’s continued purchases of Russian oil. The move marks the first use of secondary sanctions by the Trump administration against a key U.S. ally accused of fueling Moscow’s war in Ukraine.
Trump’s new directive includes a 25% tariff taking effect Thursday, followed by an additional 25% Russia-related penalty in 21 days. The White House order states that India is “directly or indirectly importing Russian oil” and justifies the move as “necessary and appropriate.”
The announcement followed a high-profile meeting in Moscow between Trump’s foreign envoy Steve Witkoff and Russian President Vladimir Putin. On social media, Trump accused India of “profiting off Russian oil” and ignoring the bloodshed in Ukraine.
India swiftly pushed back. The Ministry of External Affairs defended the imports as necessary for the energy security of 1.4 billion citizens. It criticized the U.S. for punishing actions that “several other countries” are also taking. India also hinted at potential retaliatory tariffs, saying it would “take all actions necessary to protect its national interests.”
The tariffs come at a critical time. U.S.-India trade has skyrocketed, with America importing $87 billion in Indian goods last year, primarily pharmaceuticals, electronics, and apparel. While smartphones are exempt from the new duties, industries like aerospace and energy could take a hit if India retaliates.
With the U.S.-China trade war still unresolved, businesses had increasingly turned to India as an alternative manufacturing hub. But with a 50% tariff looming, that bet just got a lot riskier.