ECONOMY
US imposes 25% tariff on Indian imports as interim trade deal fails to take off
- IBJ Bureau
- Jul 31, 2025
US President Donald Trump has imposed a 25 per cent tariff on a wide range of goods from India, effective August 1, 2025. The sweeping measure, aimed at correcting what Mr Trump described as “obnoxious” non-tariff barriers, is being seen as both a protectionist move and a pointed diplomatic signal.
At stake is India’s $87 billion export relationship with the United States – its largest trading partner – and the competitiveness of several key industries already navigating global headwinds.
While Mr Trump has framed the tariff hike as an assertion of US leverage in global supply chains, the penalties are reportedly tied to India’s growing defence and energy ties with Russia. That subtext gives the move a sharper geopolitical edge, making it harder to dismiss as mere trade retaliation.
The newly-announced duties target several of India’s top-performing export sectors. Automobiles, auto components, steel, aluminium, smartphones, solar modules, marine products, gems, jewellery and select processed food and agricultural items are all on the 25 per cent list. Pharmaceuticals, semiconductors and critical minerals, however, have been excluded.
Indian manufacturers across high-growth ex
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