Under President Donald Trump, the United States has put a 50% tariff on Indian imports, which is a big step up in a trade conflict that has been getting worse. The US says this is because India is still buying Russian crude oil. India is in a tough spot because of this action, which comes after the West boycotted Russian oil. It has to evaluate the economic benefits of cheap crude against the possible harm to its shipments to the US.
The Beginning of the Conflict: India’s Russian Oil Move
After the West stopped buying Russian oil in 2022, India, which buys a lot of energy, took advantage of a big economic opportunity. It started bringing in a lot of cheap “sour” crude oil that was once going to Europe. This change in strategy has become Russia India’s biggest oil supplier. India now imports around 2 million barrels of Russian oil per day, which is 35–40% of all the crude oil it buys. This cheap oil has helped India keep its import costs down, and local refiners can turn it into fuels for export at full market price, which makes them a lot of money.
Tariffs that the Trump Administration put in place as punishment
The US, on the other hand, thinks that India’s continuous trading with Russia is making it harder for them to put pressure on Moscow over the current crisis. The Trump administration has put in place a number of tariffs against India as punishment. On August 7, 2025, a 25% tax on Indian goods went into force. On August 27, another 25% tax will go into effect, bringing the total tax to a harsh 50%.
The US wants to lower Russia’s oil income and force President Vladimir Putin to stop the war in Ukraine. The White House has also said that India’s practice of refining Russian crude oil and selling it on the open market for a profit helps the Russian economy even more.
Effect on Indian economy and export sectors
Experts in the field and think tanks like the Global Trade Research Initiative (GTRI) are warning that India will face serious economic problems. The additional taxes will likely make Indian goods less competitive and potentially slash exports to the US by 40% to 50%. The tariffs will affect several areas, such as:
Textiles & Apparel: This industry depends a lot on the US market, and it will have to pay more than 50% in tariffs. Knitted clothing will have to pay a huge 63.9% in duties. Exporters have already started to stop taking new orders.
The US is the biggest market for Indian diamond and studded jewelry. The sector says that a 50% tariff would be a “doomsday” scenario, and many businesses could have to find new places to make things, like Dubai or Mexico.
Seafood and Shrimp: The US buys roughly 40% of all seafood that India exports. The increased tariffs, which are in addition to the current anti-dumping and countervailing charges, will make it hard for Indian shrimp to compete.
Leather, footwear, and chemicals are among labor-intensive industries that are likely to be hit hard, putting jobs and the livelihoods of small and medium-sized businesses (MSMEs) at risk.
India’s Reaction and the Bigger Picture
Prime Minister Narendra Modi gave a strong but indirect answer to the problem without identifying the US or President Trump. He said that India will “never compromise” on the needs of its farmers, fishers, and dairy producers, even if it costs a lot. He said, “India is ready for it.” This declaration shows a strong commitment to protecting the country’s interests and a possible willingness to wait out a long trade impasse.
People have also called the US hypocritical for what it has done. People who don’t like the tariffs say that China, which buys more Russian oil, hasn’t had to pay them. India has always said that its oil purchases are for national energy security and that the prices of the oil it buys are dependent on market conditions. The Indian Ministry of External Affairs (MEA) said that what the US did was “unfair, unjustified, and unreasonable,” and they promised to do “everything necessary to protect its national interests.”
The trade problems have made things unclear for Indian refiners, especially those owned by the government. Reports say they have stopped buying fresh Russian crude oil and are looking for other supplies in Africa and the Middle East. This could make things easier for the US, but it could also make India’s import bill go up. Some estimates say that if India has to stop buying Russian oil totally, it could cost the country an extra $9–11 billion a year. The market is still tranquil for now, but the future of trade between India and the US and India’s energy strategy are both uncertain.