U.S. President Donald Trump said Wednesday that the U.S. will impose a 25% tariff on goods imported from India starting August 1.
He said India, which owns the world’s fifth largest economy, will also face an unspecified fine on August 1, but did not specify the amount or purpose of it.
“Although India is our friend, we have done relatively little business with them over the years because their tariffs are too high, the highest in the world, and they have the hardest, most annoying non-monetary trade barriers for any country,” Trump wrote in a Truth Society post.
“They always bought the vast majority of military equipment from Russia and were Russia’s largest energy buyers and China, and everyone wanted Russia to stop the killings in Ukraine – everything was not good!”
The Ministry of Commerce of India, which led trade talks with the U.S., did not immediately respond to a request for comment.
Trump’s decision has shattered a limited trade agreement between the two countries, which have been in talks for months.
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U.S. and India trade negotiators have conducted multiple rounds of discussion to resolve controversial issues, especially in market access for U.S. agricultural and dairy products.
Despite progress in some regions, Indian officials refused to open their domestic markets to import wheat, corn, rice and genetically modified soybeans, citing livelihood risks for millions of Indian farmers.
New tariffs are expected to affect India’s exports to the United States, with an estimated $87 billion in 2024, including labor-intensive products such as clothing, medicines, gemstones and jewelers.
The United States currently has a trade deficit of $45.7 billion with India.
India is now joining more countries, and countries facing higher tariffs under Trump’s “Liberation Day” trade policy aim to reshape U.S. trade relations by demanding greater reciprocity.
The White House had previously warned India that its high average applied tariffs – nearly 39% of agricultural products, climbing to 45% on vegetable oils, and interest rates for apples and corn were about 50%.
Although Prime Ministers Narendra Modi and Trump promised earlier to end the first phase of the trade deal until the fall of 2025 and to expand bilateral trade to $500 billion in 2030, up from $191 billion in 2024.
In 2024, the U.S. manufacturing exports, worth about $42 billion, and energy exports such as liquefied natural gas, crude oil and coal, may also face retaliatory actions if India chooses to respond in a physical manner.
Indian officials have previously said they see the United States as a key strategic partner, especially in balancing China. But they stressed the need to protect policy space for agriculture, data governance and state subsidies.
– Reported by Susan Heaveny, Katharine Jackson of Washington, Manoj Kumar and Aftab Ahmed in New Delhi; Edited by Doina Chiacu and Mark Heinrich
