Trump Hits India With Additional Tariff Over Russia Oil

US President Donald Trump imposed an additional 25% tariff on Indian goods over its ongoing purchases of Russian energy, escalating a fight with a key Asian partner on the eve of his broad-based duties taking effect. 

Trump signed an executive order setting the new rate, the White House said Wednesday, which will stack on top of a 25% levy on Indian imports Trump announced last week. The higher duty will take effect within 21 days, according to the order.

The iShares MSCI India ETF fell to session lows after Trump’s announcement. Oil prices jumped. India’s rupee held steady at 87.91 per dollar in the offshore market.

Trump’s move came hours after talks between Washington and Moscow over the war in Ukraine failed to yield an immediate breakthrough. Indian Prime Minister Narendra Modi has said his nation is being unreasonably targeted by the US, defending consumption of Russian oil as necessary to support its economy. That hasn’t proven convincing to Trump. 

“They’re fueling the war machine. And if they’re going to do that, then I’m not going to be happy,” Trump said Tuesday in a CNBC interview.

A spokesperson for India’s Ministry of External Affairs on Wednesday called Trump’s announcement “unfair, unjustified and unreasonable” and vowed the government “will take all actions necessary to protect its national interests.”

Levies on imports from dozens of US trading partners are set to increase starting Thursday, including those from India, which will face the prior 25% charge. They’re the centerpiece of Trump’s effort to shrink trade deficits, revive domestic manufacturing and collect revenue for the federal government. The tariffs also carry risks for the global economy, including the prospect of higher costs and broken supply chains.

Ajay Sahai, director general of the Federation of Indian Export Organisations, said the latest move by the US is a “severe setback” for Indian companies as orders already have been on hold and “this additional blow could force exporters to lose long-standing clients.”

Some governments spent the final hours before the new duties took effect lobbying the Trump administration for more favorable terms. Swiss President Karin Keller-Sutter was meeting US Secretary of State Marco Rubio on Wednesday in a last-ditch effort to lower Trump’s 39% tariff.

Trump has said he is open to further negotiations, but has remained locked in a pitched battle with certain partners, including India. 

He unilaterally imposed the 25% charge on Indian goods after months of negotiations with New Delhi failed to secure a deal. He accused Modi’s government of refusing to ease market access for American goods and criticized its membership in the BRICS group of developing economies. India has been reluctant to import more agricultural products, in particular, in order to protect its farming and dairy industries. 

Trump’s tariff threats have crashed headlong into the US’s longstanding objective of cultivating India, the world’s most populous nation, as a geopolitical counterweight to China. It’s a turnabout from Trump’s first term, when he shared a warm relationship with Modi.

The US president has ramped up attacks against India in recent days, calling its economy “dead,” its tariff barriers “obnoxious” and its people indifferent to the plight of Ukrainians. Indian officials have also bristled at how Trump has characterized his role in helping to resolve the India-Pakistan conflict earlier this year.

Separately, Trump’s threat to impose tariffs on the pharmaceutical sector could deal a major blow to India, as the industry ranks among the country’s top three exports to the US. The Asian nation exported over $10.5 billion worth of pharmaceuticals in 2024–25, according to Indian Commerce Ministry data. Duties on drugs would leave over 40% of India’s exports to the US adversely affected, adding to existing levies on steel, aluminum, and autos.

Indian officials have held their ground in trade talks, calling the charges and penalties by Trump unjustified and castigating the US and EU for keeping up some imports of Russian goods, accusing the economic powers of hypocrisy.

Trump has also turned to tariffs as a tool to try and force the end of Russian leader Vladimir Putin’s invasion of Ukraine, now in its fourth year. The president boasted during his 2024 campaign he could end the conflict on his first day in office, but he has increasingly vented frustration as efforts to broker a truce have made little progress.

Trump has given Moscow an Aug. 8 deadline to reach a ceasefire or face potential sanctions, and has threatened trading partners with so-called secondary tariffs to discourage purchases of Russian energy.

The Kremlin said a meeting between Putin and US envoy Steve Witkoff earlier Wednesday only yielded an exchange of “signals.”

“On our part, in particular, some signals were conveyed on the Ukrainian issue,” the Russian president’s foreign policy aide, Yuri Ushakov, told reporters, without elaborating. “Corresponding signals were also received from President Trump.”

Ushakov said the negotiations that lasted almost three hours were “useful and constructive,” and also focused on prospects for developing US-Russia relations. Moscow will wait for Witkoff to report back to Trump before commenting further, Ushakov added.

Ahead of the talks, Trump suggested he would impose increased levies on other countries, including China, that like India buy energy from Russia.

“We’ll be doing quite a bit of that,” Trump told reporters. “We’ll see what happens over the next fairly short period of time.”

Ukraine’s allies have said energy purchases by India, China and other nations have propped up Putin’s economy and undercut pressure on Moscow to end a war that is now in its fourth year.