"they don’t do very much business with us."
President Donald Trump has announced a 25% tariff on Indian goods starting August 1, 2025, escalating trade tensions between Washington and New Delhi.
He also signalled an additional but unspecified “penalty” over India’s defence and energy imports from Russia.
In a post on his Truth Social platform, Trump said India has “the most strenuous and obnoxious non-monetary Trade Barriers of any Country”.
India’s Commerce and Industry Ministry said it is “studying its implications”.
A statement added: “India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months.
“We remain committed to that objective. The government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs.”
The ministry said India would take “all steps necessary to secure our national interest, as has been the case with other trade agreements including the latest Comprehensive Economic and Trade Agreement with the UK”.
Hours later, Trump hardened his rhetoric.
Speaking to reporters at the White House, he linked India’s BRICS membership to threats against the dollar.
He said: “Prime Minister Modi is a friend of mine, but they don’t do very much business with us. They sell a lot to us but we don’t buy from them… because the tariffs are so high.
“They have one of the highest tariffs in the world. Now, they are willing to cut it very substantially. But we will see what happens.
“We are talking to India now, we will see what happens. It doesn’t matter too much whether we have a deal or whether we charge them a certain tariff. But you will know at the end of this week.”
Trump’s post continued: “Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD!
“INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST.”
The tariff announcement precedes a planned visit by US officials to India on August 25 for the next round of trade negotiations.
The fifth round of talks concluded last week in Washington.
White House economic adviser Kevin Hassett said that Trump “believes his 25% tariff announcement will help the situation”.
The 25% tariff is slightly below the 26% rate Trump floated in April but higher than tariffs agreed with Vietnam (20%) and Indonesia (19%).
The additional “penalty” marks the first time the US has proposed secondary tariffs linked to Russian imports.
The exact size of this penalty has not been disclosed, with Hassett saying Trump and US Trade Representative Jamieson Greer “will have more information ‘shortly’.”
India’s oil imports from Russia have surged to 35-40% of its total crude purchases from less than 1% before the Ukraine war. India is now the second-largest buyer of Russian crude after China.
Trump also complained about the US trade deficit with India, posting: “MASSIVE TRADE DEFICIT WITH INDIA!!!”
In 2024, goods trade between the two countries totalled $129.2 billion.
US exports to India rose 3.4% to $41.8 billion, while imports from India increased 4.5% to $87.4 billion. This left a $45.7 billion goods deficit, up 5.4% from 2023.
India’s top exports to the US include pharmaceuticals, telecom equipment, jewellery, petroleum products, vehicle parts, and iron and steel products.
Its key imports from the US include crude oil, coal, polished diamonds, electrical machinery, and aircraft.
Trump has repeatedly cited trade deficits as a negative for the US economy.
His administration recently signed a deal with the European Union imposing a 15% tariff on EU goods, while the bloc pledged $750 billion in US energy purchases and $600 billion in investments by 2028.
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