The U.S. has announced an Extra 25% Tariff on Indian goods, raising total duties to 50%, citing India’s continued imports of Russian crude oil. The White House claims that these purchases indirectly support Russia’s war effort in Ukraine, despite Western sanctions aimed at isolating Moscow economically. The decision marks a significant escalation in trade tensions between the two countries.

India swiftly responded, calling the move “unjustified” and asserting that its energy purchases are in line with its national interests and international law. Indian officials emphasized that the country will not succumb to external pressure and vowed to take necessary steps to defend its economic interests.

Analysts warn that the steep tariff hike could deal a blow to Indian exports, particularly in labor-intensive sectors like textiles, leather, and engineering goods, which are already grappling with global demand slowdowns. The U.S. is one of India’s largest export markets, and the increased duties may render Indian products less competitive, potentially leading to job losses and revenue declines.

The move has also sparked concern among global trade observers, who view it as a sign of growing protectionism and a possible shift away from multilateral dispute resolution mechanisms like the WTO. Some experts caution that retaliatory tariffs from India could further strain bilateral ties and disrupt supply chains across key sectors, including pharmaceuticals and information technology.

Diplomatic efforts are reportedly underway, but with both sides standing firm, a swift resolution appears unlikely.

Extra 25% Tariff India/US