Trump’s 25% Tariff Hits India: Impact on Indian Exports and US-India Ties

Trump declares 25% tariffs on India starting its effect from August 1. Trump cites Russian association, BRICS membership, and a series of accusations. Read the piece to find out the implications for the Indian market.

Tariffs or Penalty? Trump’s Silent Aggression 

US President Donald Trump imposed a 25% tariff on India after a series of considerations. 
Though the US sees India as an ally nation, it has significantly held India accountable for its association with Russia, who is currently at an unresolved war with Ukraine, and membership of BRICS, which primarily focuses on de-dollarization, and additionally, an “unspecified penalty.”

In a press conference he said, “We’re negotiating right now, and it’s also bricks. You know they have BRICS, which is basically a group of countries that are anti-United States, and India is a member of that, if you can believe it. It’s an attack on the dollar, and we are not going to let anybody attack the dollar. So it's partially bricks, and it's partially the trade situation. It’s a deficit. We had a tremendous deficit. So as you know, Prime Minister Modi is a friend of mine, but they don't do very much business in terms of business with us. They sell a lot to us, but we don’t buy from them. You know why? Because the tariff is so high. They have one of the highest tariffs in the world. Now they’re willing to cut it very substantially but we will see what happens.”

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— MAGA Resource (@MAGAResource) July 31, 2025

On July 30, the Indian Govt. Issued a Statement with a Resilient Approach. They assured their commitment to protect the farmers, entrepreneurs, and MSMEs. They also confirmed that trade talks are ongoing to bring out appropriate solutions. The 5th round of trade talks has been concluded. 

The government assures its support to Indian Market.

The Ministry of Commerce and Industry Issued a Statement :

“The Government has taken note of a statement by the US President on bilateral trade,Studying its Implications, 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, GOI attaches the utmost importance to protecting and promoting the welfare of Farmers, Entrepreneurs and MSMEs. The Government will take all steps necessary to secure our national interest.
 
The extra Penalty was Applied over India’s large -scale Military Purchases from Russia, Per U.S 
US had initially warned countries buying the Russian Oil will face Massive Secondary Penalties 

US on a Trade deficit with India 

According to the data, India exports 70% more to the US than it imports from it, creating a Trade deficit for the US. US imports commodities amounting to $78 billion but US exports are $46 Billion. What India Exports to the U.S are 

• Gems and Jewelry
• Pharmaceuticals
• Textiles and Apparel
• Machinery and electrical equipment 
• Organic chemicals 
• IT services 

More on Imposed Tariffs and Impact 

Tariffs are the taxes on imported goods. They increase the prices of the foreign goods and services, making it hard for businesses to sell into a country, impacting their businesses severely. 

• Reduced Exports can damage the revenue of the Indian businesses selling into the US.
• Trade Deficit Pressure can disbalance India’s Trade Balance. 
• Investors will be cautious before investing in companies from certain sectors. 
• May lead to Job layoffs 
• Companies would explore other markets and target Indian consumers primarily. 

#WATCH | US President Trump imposes 25% tariffs on India | Delhi | Chairman of Tourism Expert Committee at Chamber of Commerce, Subhash Goyal says, "It is a sad day for Indian exports because India is doing exports worth over $100 billion and our surplus is over $40 billion. It… pic.twitter.com/bSDmBaWRsE

— ANI (@ANI) July 30, 2025