US President Donald Trump on Tuesday announced plans to “substantially raise” tariffs on India within the next 24 hours, intensifying trade tensions between the two nations.
The move follows Trump’s accusation that India is profiting from discounted Russian oil purchases and subsequent sales.
“With India, what people don’t like to say is they’re the highest tariff nation. They have the highest tariffs of anybody. We do very, very little business with India because their tariffs are so high,” Trump said during an interview with CNBC’s Squawk Box.
The trade rift between Washington and New Delhi has been steadily worsening, with the US already imposing tariffs on a range of Indian goods.
According to reports, India currently faces a 25 percent tariff on all exports to the US. Analysts warn that this could result in an estimated $33 billion loss in export revenue and a 20-basis point dip in GDP.
Trump’s criticism centers on India’s imports of discounted Russian crude, which he claims are being resold for significant profits. India has strongly refuted the claims, pointing to what it describes as Western double standards.
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New Delhi argues that both the US and European Union continue to maintain various trade relationships with Russia despite ongoing geopolitical tensions.
An escalation in tariffs could have serious repercussions for India’s economy. The US is one of India’s largest trading partners, accounting for around 18 per cent of its total exports. Key sectors such as textiles, gems and jewelry, and electronics could be particularly hard hit by higher duties.
Despite the friction, both nations remain engaged in trade negotiations. India is lobbying for relief from the US’s 10 per cent baseline tariff and is pursuing an interim trade agreement, with the long-term goal of a comprehensive Bilateral Trade Agreement.
While the outcome of these negotiations remains uncertain, the current standoff marks a critical juncture in US-India economic relations. The next few days are expected to be crucial in determining the trajectory of one of the world’s most significant trade partnerships.