WASHINGTON, D.C. — The commercial relationship between the U.S. and India has gotten a lot worse after the U.S. Department of Homeland Security sent out a draft notice saying that a 50% tax would be put on some Indian goods. This new tax, which is in addition to the 25% “reciprocal” tax that is currently in place, is meant to make India stop buying cheap Russian crude oil.
The notice, which will go into effect on August 27, says that the additional taxes will apply to Indian goods “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on August 27, 2025.”
Donald Trump, the President of the United States, has defended the decision, saying it is part of a bigger plan to use “aggressive economic leverage” on Russia to stop the war in Ukraine. Vice President JD Vance agreed with this and said that the “secondary tariffs on India” are aimed to make it “harder for the Russians to get rich from their oil economy.” Trump has said several times that his use of tariffs has helped “stop wars.” He has also threatened foreign countries over digital levies on American tech companies.
But India has fought back hard. Prime Minister Narendra Modi made it clear in Ahmedabad that his government will not give in to outside pressure. “For Modi, the needs of farmers, cattle raisers, and small businesses come first. “We may face more pressure, but we will get through it,” he added, and he advised people and businesses to buy “Swadeshi” (Made in India) goods first.
S. Jaishankar, the Minister of External Affairs, has also been very critical of the U.S. position. “It’s funny that an American government that supports business would accuse others of doing business,” he remarked. He said that India’s choice to acquire Russian oil was based on its own interests and helped keep oil prices stable around the world. He also said that both Europe and the U.S. still buy refined goods from India that are created with Russian oil.
The rising trade tensions are seen as a big blow to the U.S.-India strategic partnership, which has taken a lot of work to build over the previous 20 years. Some U.S. officials have said they expect the tariffs could be lifted if the Russia-Ukraine peace talks go well. However, India has made it clear that it would not let outside powers control its foreign and energy policies. The possible tariffs could have a big effect on India’s labor-intensive industries, like textiles, gems, and jewelry. They could also make New Delhi want to strengthen its trade ties with China and Russia.