So far: July 30, US President Donald Trump announced 25% of tariffs on imports from India “plus punishment”. Although it gives rest months speculating on what tariffs would be on Indian imports to the US, it opens new uncertainties with regard to the potential bilateral trade agreement between India and the US
What did Mr. Trump announce?
Mr. Trump quoted the Indian tariff and non -tariff measures for trade and his negotiations with Russia on energy and military equipment, as the main reasons why he imposes 25% of tariffs and punishment. So far, there is no clarity of what a fine will look like, but in the past, Mr. Trump has threatened 10% of the other tariff in the Brics countries. If this happens, then effective tariffs on Indian imports would be 35%. In the US, there is also legal regulations in the process of approval, which could see another 500% tariff in India, China and Brazil for their negotiations with Russia.
What does this mean for India?
The tariffs are paid by importers. Therefore, tariffs for Indian imports would apply to those in the US that imports Indian goods. This means that Indian goods will be more expensive for them. This is a real problem for India.
According to Bank of Baroda’s research, the macro level is expected that the tariffs and the impact they will have on Indian exports will only reduce India’s GDP GDPs by 0.2%. Thus, if the growth prognosis was 6.6%, then these tariffs – if stored – could reduce growth to 6.4%. However, the problem arises in individual industries. According to Bank of Baroda, industries such as clothing, precious stones, automatic parts, leather products and electronics (although their integration is uncertain) could face a pinch and would have to rework their strategies. “The problem is that some competitive nations, such as Vietnam (20%), Korea (15%) and Indonesia (19%), have lower tariffs compared to India,” Bank of Baroda added in her research note.
How did things come to such a passage?
While most commercial agreements are negotiated over the years, Prime Minister Narendra Modi and Mr. Trump announced in February 2025 that he would conclude the first trade agreement by autumn. To state this in the perspective, the recently signed comprehensive economic and business agreement between India and the United Kingdom took approximately three years.
What announced the announcement of Mr. Modi and Mr. Trump was remarkable that it came before the great movement of his mutual tariffs, which caused other countries to start negotiating with the US. The announcement was therefore a strong and positive obligation to strengthen the links between the two countries. After that, however, Mr. Trump announced his mutual tariffs on 2 April. It was a 10% basic tariff for all countries and other tariffs in the case of Earth’s Earth. For India, this sum was 26%. A week later, however, Mr. Trump announced a 90 -day pause of these tariffs so that they could be hit by bilateral agreements to reduce the US business deficit for most of their business partners. The 90 -day pause was supposed to end in July, but Mr. Trump expanded it to 1 August.
What are the spots of friction?
It is difficult to determine any recent development that has acute relationships, but in the last few months between the two countries between the two countries. The matter of Indian tariffs and non -tariff barriers was something Mr. Trump emphasized since his first term of office of the President. It was no surprise that he was dealing with the problem in his second term.
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Mr. Trump also brought Indian engagement with Russia and said that countries like India partly fund the Russian War with Ukraine. However, India has repeated that it will ensure its national and energy security, and if it means buying cheap Russian oil, then it would do. Russia is currently about 35-40% of Indian oil imports, making it a significant partner. In addition, India remained adamant about maintaining the main parts of its agriculture and milky sectors from trade agreements, including the US, which disrupted the US negotiators, but it is the “red line” of India that will not exceed. The opening of these sectors would reveal Indian relatively low productivity of farmers global competition, which is likely to have a devastating impact on their livelihood.
Then there is the fact that Mr. Trump has repeatedly stated that it and his business conversations that encouraged India and Pakistan to agree to the ceasefire after the opening of the operation of the Sindoor in India. The fact that the Indian government refuted it was only Mr. Trump angry. Trumps also angry the Indian establishment because it provided the opposition to the government attack.
India reported the world’s business organization that it reserves the right to store other tariffs for imports from the US to retaliate against its higher tariffs on items such as steel, aluminum and cars.
Take these things together, Mr. Trump’s announcement is a confirmation that at least one, not all these factors, worked on acidic relationships.
Will India continue to apply these tariffs?
Although there was a lot of talk between India and the US that returned the reciprocal tariffs, Indian officials were the date of such an agreement Cagey. The announcement of tariffs by Mr. Trump confirms that such an agreement is not coming.
However, both sides were remarkably consistent with their obligation that a trade agreement would be completed by the deadline for autumn 2025. So far, negotiators from both sides have met in Nový Delhi and Washington, including the first session in March, where the reference conditions for negotiations were completed. The US team visits India at the end of August to give interviews. However, things become more complicated for Indian negotiators because Mr. Trump has now directly linked to Indian negotiations with Russia with the Indian business relationship with the US
The tariffs will soon come into force. According to the executive order of 31 July, Mr. Trump stated that his duties in India and other countries would come into force “7 days after the date of this command”.
What about the solution with other countries?
Over the last month, Mr. Trump has concluded agreements with Great Britain, Indonesia, Philippines, Japan, EU and South Korea. The Agreement with the United Kingdom does not specify the general level of tariffs, but it will see that British exports to the US attract 10% tariff, a decline in previous 27.5% and the removal of airplanes to air exports to the US Japan negotiates lower tariffs 15% for its exports to the US, as well as the EU.
Published – 3rd August 2025 02:50
