A new 25% reciprocal tariff on Indian goods, effective August 1, has been announced by US President Donald Trump, coupled with an unspecified penalty for purchases from Russia. Trump’s rationale is rooted in his assertion that India’s trade policies are highly restrictive, characterized by “obnoxious” non-monetary barriers and “among the highest” tariffs globally, which he claims have limited US trade.
In a post on Truth Social, President Trump lauded his tariff-based economic agenda, stating that it has made “America great and rich again” by effectively combating a “decades-long onslaught of tariffs.” He declared the US had transformed from a “dead country” to the “hottest” globally, emphasizing tariffs as a core element of this economic revival.
The Indian Ministry of Commerce and Industry has responded cautiously, confirming it is “studying its implications.” The ministry also highlighted ongoing negotiations with the US for a “fair, balanced, and mutually beneficial bilateral trade agreement,” signaling a desire for a diplomatic resolution.
Furthermore, the statement underscored the government’s commitment to “protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs,” indicating that India’s domestic economic welfare will be a paramount consideration in its future decisions. The imposition of these tariffs creates a significant point of contention in US-India relations, necessitating careful navigation and potential areas of disagreement.