In a fresh shock for India-U.S. trade ties, former U.S. President Donald Trump has declared a new 25% tax on all goods imported from India. He also warned of adding another penalty linked to India’s trade and defense dealings with Russia, which he described as “not good” given the ongoing war in Ukraine.
Trump’s remarks have put a sudden stop to trade discussions between India and the United States, which had been going on for several months in hopes of reaching a better deal. Many experts say this step could hurt Indian exporters, who now face a bigger challenge selling their products in the U.S. market.
One of the main reasons for this move is Trump’s long-standing complaint about India’s high taxes on American goods. He believes it is unfair that India charges heavy import duties on U.S. products but expects low tariffs when its own goods enter the American market.
Adding to the issue, Trump said India’s strong ties with Russia for oil and weapons are not acceptable at a time when the U.S. is supporting Ukraine in its war with Russia. This so-called “Russia penalty” could mean even more restrictions on India’s exports if ties with Moscow continue.
The announcement comes just days before the August 1 date when some older trade tariffs were set to be brought back. With this new decision, it seems Indian businesses may face tough days ahead in the U.S. market, unless both sides find a way to settle the disputes through fresh talks.
