In a move that has sent shockwaves through diplomatic and trade circles, U.S. President Donald Trump on Wednesday signed a sweeping executive order that imposes an additional 25% tariff on all Indian goods entering the United States, effectively doubling the previous 25% duty and bringing the total tariff to a staggering 50%.
The decision, announced on the White House website, is being linked directly to India’s continued purchase of oil from Russia, which the Trump administration views as a breach of the U.S.-led campaign to economically isolate Moscow.
Trump’s announcement follows closely on the heels of a Tuesday interview with CNBC, during which the President signaled his intentions to escalate tariff pressure on New Delhi. Speaking candidly, Trump said, “India has not been a good trading partner because they do a lot of business with us, but we don’t do business with them.
So we settled on 25 per cent, but I think I’m going to raise that rate quite substantially in the next 24 hours.”
Hours later, he followed through with the threat. Citing his authority under the International Emergency Economic Powers Act (IEEPA), the National Emergencies Act, and various provisions of U.S. trade law, Trump issued a formal executive order that authorizes the additional tariffs.
The measure takes effect in two phases — with the initial 25% tariff enforcement starting August 7, and the newly added 25% surcharge coming into force 21 days later.
India Reacts Strongly, Calls Tariffs “Unjustified and Unreasonable”
The Indian government has responded with sharp criticism, calling President Trump’s unilateral decision “unjustified and unreasonable.”
In a statement issued earlier this week, the Ministry of External Affairs (MEA) rejected Washington’s rationale, pointing out that the U.S. and the European Union continue to maintain extensive trade and energy relations with Russia, yet only India is being targeted with punitive trade measures.
“The U.S. appears to be selectively applying standards and singling out India in a manner that is neither equitable nor constructive to the bilateral relationship,” the MEA noted, underscoring the growing sentiment in New Delhi that the Trump administration’s approach is more about coercion than cooperation.
Shashi Tharoor Speaks Out: A Wake-Up Call for Indian Trade Policy
Prominent Congress Member of Parliament and former Under-Secretary-General at the United Nations, Shashi Tharoor, voiced serious concern about the long-term economic implications of Trump’s tariff escalation.
Speaking to reporters shortly after the executive order was announced, Tharoor said, “I don’t think that’s particularly good news for us. That takes our total tariffs to 50 per cent. Then that’s going to make our goods unaffordable to a lot of people in America.”
Tharoor emphasized that this sudden hike puts Indian exporters at a significant disadvantage compared to regional competitors. “In particular, when you’re looking at these percentages, you have to compare them with the tariffs being levied on some of our competitors.
I’m afraid that if you look at people like Vietnam, Indonesia, the Philippines, even Bangladesh and Pakistan have lower tariffs than us. Ultimately, people will not be buying goods from us in America if they can buy them cheaper elsewhere,” he said.
Call for Diversification of Export Markets
Highlighting the urgent need for a strategic rethink of India’s export model, Tharoor urged the government to move swiftly toward market diversification.
“This means we need to very seriously diversify to other countries and other markets that may be interested in what we have to offer. We now have an FTA (Free Trade Agreement) with the UK. We are talking to the EU.
There are many countries in which hopefully we would be able to (expand), but in the short term, it is a blow,” he warned.
Tharoor’s remarks reflect broader concerns among Indian exporters and economists that the rising protectionism in the U.S. — once a key destination for Indian goods — may no longer be reliable.
With the global economy still facing post-pandemic disruptions, geopolitical tensions, and inflationary pressures, a 50% tariff could be crippling for key Indian sectors such as textiles, pharmaceuticals, IT hardware, engineering goods, and auto components.
Timing and Political Context
Notably, Trump signed the executive order just under 14 hours before the original tariff schedule was due to take effect.
The move is being seen by analysts as part of his broader political strategy ahead of the 2024 U.S. elections, with Trump aggressively doubling down on his “America First” trade doctrine and attempting to portray strength in dealing with global partners who maintain ties with Russia.
Critics argue that such abrupt and disproportionate trade measures risk damaging long-standing alliances, especially with countries like India, which have been key strategic partners in the Indo-Pacific framework and other multilateral efforts.
What Lies Ahead?
With the tariffs set to be fully enforced by the end of August, the Indian government is expected to explore retaliatory options, possibly through diplomatic channels or trade arbitration forums like the World Trade Organization (WTO).
However, the more pressing concern lies in the immediate economic fallout, especially for small and medium enterprises (SMEs) in India that rely heavily on U.S. demand.
Meanwhile, other countries are also closely monitoring the development. Vietnam, Indonesia, and Bangladesh — direct competitors to India in multiple export categories — are poised to benefit from the tariff disparity.
At the same time, questions are being raised about whether Trump will soon turn his tariff gun toward China, the world’s largest buyer of Russian oil, as his administration ramps up secondary sanctions.
For now, India must brace itself for economic turbulence while seeking broader global partnerships to reduce dependence on any single market. As Shashi Tharoor aptly put it, the current crisis is not just a blow — it’s a turning point.
#IndiaUSRelations #ShashiTharoor #TrumpTariffs #TradeWar #IndiaExports #RussiaOilTrade #Geopolitics #IndoUS #ExportDiversification #Protectionism #USIndiaTensions #SecondarySanctions #GlobalTrade #MakeInIndia #AmericaFirst #FTA #IndianEconomy #TariffShock #WTO #ShashiTharoorOnTrade