US Slaps Fresh Tariffs on Indian Goods, Trade Ties Strained Further

The United States has issued a formal notice confirming that additional tariffs on Indian imports will come into effect on August 27, escalating tensions between Washington and New Delhi over Russian crude oil purchases.

The notification, released by the Department of Homeland Security, said the duties were being imposed as part of America’s response to what it called “threats to the United States by the government of the Russian Federation.” The measures will apply to all Indian products listed in the annex, covering consignments that are either freshly imported for consumption or withdrawn from bonded warehouses after 12:01 am EDT on August 27, 2025.

“To address that unusual and extraordinary threat to the national security and foreign policy of the United States, Executive Order 14066 prohibited, among other things, the importation into the United States of certain products of Russian Federation origin, including crude oil; petroleum; and petroleum fuels, oils, and products of their distillation,” the notice read.

The DHS circular underlined that the new tariff slabs were designed to penalize India’s discounted energy imports from Russia. Washington has argued that such purchases indirectly aid Moscow’s war effort in Ukraine — an allegation India has consistently denied.

Modi’s Ahmedabad Pledge

The timing of the announcement coincided with Prime Minister Narendra Modi’s fiery address in Ahmedabad on Monday. From the dais, Modi assured farmers, small shopkeepers, entrepreneurs, and animal rearers that their interests would remain his government’s top priority despite external pressures.

“Today in the world, everyone is busy doing politics based on economic interests,” he said. “From this land of Ahmedabad, I say to my small entrepreneurs, my shopkeeper brothers and sisters, my farmer brothers and sisters, my animal husbandry brothers and sisters — for all of you, I promise again and again, your interests are paramount for Modi.”

The Prime Minister added that his government would never allow small businesses or rural communities to suffer due to foreign decisions. “No matter how much pressure comes, we will continue to grow our capacity to withstand it. The Atmanirbhar Bharat Abhiyan is drawing immense energy from Gujarat, and behind this are two decades of hard work,” he said.

Tariff Surge and Political Fallout

The Donald Trump administration’s move to hike tariffs on Indian goods up to 50 per cent — including a 25 per cent penalty tied specifically to Russian crude oil imports — has left bilateral trade relations on edge. Washington has maintained that India’s reliance on discounted Russian energy amounts to indirect funding of Moscow’s war machine.

New Delhi, however, argues that it began purchasing Russian crude at cheaper rates only after Western countries imposed sanctions on Moscow following its 2022 invasion of Ukraine. Officials here insist that the purchases are essential for India’s energy security and entirely legitimate under international trade rules.

Jaishankar’s Sharp Response

Foreign Minister S Jaishankar, speaking at an event in Delhi over the weekend, openly ridiculed Washington’s criticism.

“It’s ironic for a pro-business American administration to accuse others of doing business,” he said, drawing laughter from the audience. Taking the point further, he added: “If you don’t like Indian oil or refined products, don’t buy them. Nobody is forcing you. But Europe buys, America buys. So if you have a problem, just stop buying.”

Outlook

With the new tariffs set to be enforced within hours, exporters in India are bracing for an uncertain phase in bilateral commerce. At the same time, Modi’s government has signaled that it will not compromise on protecting domestic producers, farmers, and small entrepreneurs, even as New Delhi works to manage the diplomatic fallout with Washington.

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