New 50% Tariff on Indian Imports Imposed by the US Amid Ukraine Conflict

Introduction of Tariff on Indian Goods

A new tariff rate of 50% on goods imported from India to the United States came into effect on Wednesday.

Background of the Tariff Increase

The Trump administration had declared on August 6 that it would increase tariffs on Indian imports to 50% as a response to the purchase of Russian oil during the ongoing Ukraine conflict. Previously, a 25% reciprocal tariff had already been implemented.

Trump has consistently claimed that India's imports are contributing to Russia's military actions in Ukraine.

Official Notification and Justification

A draft notification from the Department of Homeland Security, released on Tuesday, indicated that the increased tariffs were a result of perceived threats posed by the Russian government to the United States.

Impact on Indian Exports

These tariff increases could potentially impact approximately 55% of India's merchandise exports to the US, valued at $87 billion, and may provide a competitive edge to countries like Vietnam, Bangladesh, and China, according to exporter groups.

In 2024, the US was identified as India's primary export market.

Rising Diplomatic Tensions

Since the announcement of the 50% tariff, diplomatic relations between New Delhi and Washington have become increasingly strained.

On Monday, Prime Minister Narendra Modi asserted that his administration would not yield to the pressures of these secondary tariffs.

“Regardless of the pressure, we will continue to strengthen our resilience,” Modi stated. “My government will ensure that small entrepreneurs, farmers, and livestock rearers are not adversely affected.”

India's Response to the Tariffs

New Delhi has previously expressed that it is “extremely unfortunate” for the US to impose additional tariffs on India for actions that many other nations are also undertaking in their own interests.

The spokesperson for the Ministry of External Affairs remarked that these measures are unfair, unjustified, and unreasonable, emphasizing that India will take all necessary steps to safeguard its national interests.