Trump Slaps Hefty 50% Tariffs on India Amidst Russian Oil Deal

New Trade Tensions Emerge as India Faces Escalating Import Taxes

President Donald Trump has enacted a sweeping executive order, imposing a substantial 25% tariff on India’s Russian oil purchases. This move effectively doubles existing tariffs to a staggering 50%, creating significant economic pressure on India and potentially reshaping international trade dynamics.

India Brands Tariffs “Unfortunate” and “Unjustified”

The Indian government has strongly condemned the new tariffs, labeling them “unfortunate,” “unfair,” “unjustified,” and “unreasonable.” Foreign Ministry spokesman Randhir Jaiswal stated that India reserves the right to take all necessary measures to safeguard its national interests.

“We reiterate that these actions are unfair, unjustified and unreasonable,” Randhir Jaiswal said in a statement, adding that India would take all actions necessary to protect its interests.

Jaiswal emphasized that India’s oil imports are driven by market considerations and a commitment to ensuring energy security for its vast population. The tariffs are set to take effect three weeks after their signing, granting a window for potential negotiations with the U.S. administration.

Trade Impact and Hypocrisy Claims

Former Indian trade official Ajay Srivastava warned that the elevated tariffs could make Indian goods prohibitively expensive in the U.S., potentially slashing exports by as much as 50%. He criticized the decision as “hypocritical,” pointing out that China, a larger buyer of Russian oil, was excluded from the order.

Srivastava suggested that Washington’s reluctance to target Beijing stems from China’s critical role in supplying essential minerals for U.S. defense and technology sectors. In 2024, the U.S. recorded a significant trade deficit of $45.8 billion with India, importing substantial quantities of pharmaceuticals, precious stones, and textiles.

Contradictory Policies and Global Energy Market Dynamics

The new tariffs appear to diverge from previous efforts by the Biden administration and G7 nations, which had encouraged India to purchase Russian oil under a $60 per barrel price cap implemented in 2022. The intention was to curtail Russia’s revenue for its war in Ukraine by forcing discounted sales or costly alternative shipping. However, Russia has circumvented these measures through a “shadow fleet.”

The U.S. is currently engaged in trade negotiations with China, having imposed a 30% tariff on Chinese goods, to which Beijing retaliated with a 10% tax. Despite these trade disputes, India has maintained its strategic partnerships, including its continued oil imports from Russia, even as it advocates for peace in Ukraine. The current market price for a barrel of oil hovers around $65.84, slightly up on the day.