What’s happening
On August 5, 2025, U.S. President Donald Trump said in a CNBC interview that “India has not been a good trading partner” and promised to totally hike U.S. tariffs on Indian goods within 24 hours, citing India’s continued purchase of Russian oil as the driving issue.
- India already faced a 25% tariff, charged via an executive order on August 1. Trump now plans to lift this rate “very substantially,” though he did not specify an exact new percentage.
Why Trump is making this move
- He blames India of fuelling Russia’s war machine by buying discounted Russian oil and reportedly reselling it for profit, erosion Western sanctions on Moscow.
- Trump further rejected India’s offer to lower tariffs on U.S. goods, calling it lacking unless India halts its oil trade with Russia.
🇮🇳 India’s response
- India’s Foreign Ministry condemned the tariff threats as unjustified and cited double standards—noting that both the U.S. and EU continue trading with Russia in other sectors, such as energy, fertilisers, and machinery
- Indian officials defended that its use of Russian oil is economically necessary and helps stabilise global oil prices. They emphasised India’s sovereign right to choose trading partners.
Historical backdrop
- In February 2025, PM Narendra Modi visited Washington, where he and Trump concurred on a “Mission 500” goal to increase collective trade to US $500 billion by 2030, and discussed energy deals to reduce trade difference.
- Trump’s broader economic route included extensive“Liberation Day” tariffs announced on April 2, 2025, under which India was assigned a 25% tariff due to trade difference concerns. Most nations face a baseline 10% global tariff, with higher rates for key trading partners
