Washington — The United States is preparing to impose a sweeping 25% tariff on Indian imports, escalating trade tensions between the world’s largest democracies amid an already volatile global economic climate. President Donald Trump confirmed the move during remarks to reporters on Tuesday, accusing New Delhi of maintaining what he called “the most unfair tariffs on American goods.”
The punitive measure, if implemented, will mark a sharp reversal in trade diplomacy between Washington and New Delhi, signaling a return to hardline economic nationalism under Trump’s second administration. “They will pay 25%,” the president declared. “India has changed basically more tariffs than almost any other country… now I am in charge.”
Trump’s comments suggest that the United States is abandoning negotiations aimed at finalizing a new bilateral trade framework with India, one that had been under discussion for months following the controversial “Liberation Day” tariff program launched in April 2025. Under that initiative, the Trump administration imposed a blanket 10% tariff on all imports and singled out India, China, and Germany for even harsher treatment with “reciprocal” tariffs of up to 26%.
Although India initially secured a temporary 90-day waiver from full implementation, that grace period is now expiring without any new concessions from New Delhi. India’s Ministry of Commerce has so far remained silent on the looming tariff, though officials have privately warned that retaliatory duties on American tech, pharmaceutical, and agricultural exports are being readied.
The 25% levy is expected to impact more than $80 billion worth of Indian goods annually, including textiles, auto parts, chemicals, and machinery. Economists warn the new tariffs could deliver a bruising blow to India’s export-driven sectors at a time when the country is already navigating slowdowns in consumer demand and supply chain disruptions stemming from the ongoing conflict in the Red Sea.
President Trump’s latest move also underscores his administration’s increasingly transactional view of foreign policy, where military and economic relationships are directly tied to trade imbalances. In the past year alone, Trump has threatened punitive tariffs on allies including South Korea, Japan, and even the EU, leveraging access to U.S. markets as a tool to extract diplomatic and economic concessions.
In India, political analysts say the tariffs may fuel anti-American sentiment ahead of state elections later this year, especially as Indian companies face higher costs and reduced access to their largest export market. Trade groups such as the Federation of Indian Export Organisations (FIEO) have urged the Modi government to reconsider its “non-aligned” tariff policies, warning that the fallout from a full-blown tariff war could push India’s GDP growth below 5% for the first time in a decade.
The move has already sent ripples across global markets. Indian rupee futures fell slightly against the dollar in overnight trading, while U.S. importers of Indian goods are scrambling to reprice contracts and renegotiate supply terms. Tech companies relying on Indian manufacturing hubs—particularly for components and semiconductors—are warning of delays and disruptions in the lead-up to the holiday season.
According to Mehr News Agency, Trump’s exact words left little room for ambiguity: “We are going to see. I know it is not okay,” he said, underscoring his dissatisfaction with India’s trade posture and indicating that further economic penalties could follow if the South Asian giant fails to comply with Washington’s demands.
According to Reuters, the United States is still engaged in trade negotiations with India even after announcing a plan to impose a 25 percent tariff on Indian goods effective August 1. President Trump emphasized during remarks at the White House that “they’re willing to cut [their tariffs] very substantially,” suggesting ongoing dialogue and potential flexibility. He added, “We’re talking to India now – we’ll see what happens… You’ll know by the end of this week,” hinting that a near-term resolution might yet emerge despite renewed pressure on bilateral trade relations.
