Trump Imposes 25% US Tariff on Indian Exports

On July 30, 2025, U.S. President Donald Trump announced a sweeping 25% tariff on all Indian exports effective August 1, accompanied by unspecified penalties tied to India’s procurement of Russian energy and military equipment. The decision comes as months‑long India–U.S. trade negotiations have failed to yield agreement. This move is a direct response to disputes over market access, especially in agriculture and dairy sectors where India has resisted opening up.

The tariff covers an estimated $87 billion in Indian exports including garments, pharmaceuticals, jewellery, petroleum and engineering goods—sectors that form the backbone of Indian export revenues. With the U.S. holding a trade deficit of approximately $45.7 billion, the announcement disrupts bilateral efforts to reach a trade deal capable of increasing commerce to $500 billion by 2030.

Markets in India reacted sharply. The rupee slid to its weakest levels since March, with the currency falling through the ₹87.00 mark to reach ₹86.2 per dollar by mid‑morning, prompting speculation about RBI intervention. Indian equity futures and export‑oriented mid‑caps declined as investors reassessed risk to earnings and global supply‑chain resilience. With the U.S. seeking deeper concessions and India holding firm on key sensitive sectors, trade talks now face a critical juncture with heightened geopolitical overtones.