Washington: The United States has sharply escalated trade tensions with India, as President Donald Trump’s decision to impose an additional 25% tariff on Indian imports tied to Russian crude oil came into effect on August 27, 2025. The move has effectively doubled the total levy on these goods to 50%, marking the steepest tariff rate Washington has applied to any of its trading partners.
The Department of Homeland Security confirmed the directive, noting that the higher duties apply to all Indian products entering U.S. commerce or withdrawn from warehouses after 12:01 a.m. EDT on August 27.
To ease the transition, the U.S. has allowed limited exemptions. Goods already shipped before the deadline and supported by customs documentation under code HTSUS 9903.01.85 will remain exempt until September 17, 2025, provided they clear American ports within that grace period.
Trade experts have raised alarm over the implications. Mark Linscott, Senior Advisor at The Asia Group, said the development represents a major setback for both sides: “What started as a relationship filled with promise is now a lose-lose for India and the United States.”
Nisha Biswal, also a Senior Advisor at The Asia Group, stressed that India is now the only country facing a 50% tariff in the U.S. market. She warned the measure could severely impact textiles, garments, and other key sectors, undermining India’s positioning as a global manufacturing alternative to China.
Basant Sanghera, Managing Director at The Asia Group, cautioned that without urgent diplomatic engagement, the tariffs could cause lasting damage to U.S.–India economic ties and derail New Delhi’s ambitions to boost industrial competitiveness.
The escalation comes as part of Washington’s broader crackdown on countries linked to Russian crude oil flows. For India, however, the tariff hike threatens to disrupt export markets, strain its fast-growing manufacturing sector, and complicate its long-term economic strategy.