Trump imposes 25% tariffs on Indian imports & ‘penalty’ for buying Russian energy & arms
(Updated with India’s reaction)
By Sunil Kumar Batra
New Delhi, July 30 (BVI): In an unfriendly decision, US President Donald Trump today announced 25% tariffs on imports from India along with an additional “penalty” for buying energy and arms from Russia with effect from August 1, setting off concerns in the Indian industry.
The Indian government, in its initial response, said it has “taken note of a statement by the US President on bilateral trade” and “is studying its implications.”
Trump, in a post on social media ‘Truth Social, wrote, “Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country.
“Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of energy, along with China, at a time when everyone wants Russia to stop the killing in Ukraine. All things are not good.
“India will therefore be paying a tariff of 25%, plus a penalty for the above, starting from August first.”
Trump, however, did not specify the details of the “penalty”.
The announcement came even as negotiations for a trade deal are underway between India and the US for several weeks.
In a statement in response to Trump’s announcement, the Ministry of Commerce and Industry noted that “India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective.”
It said the Government attaches the utmost importance to protecting and promoting the welfare of the country’s farmers, entrepreneurs, and MSMEs.
“The Government will take all steps necessary to secure our national interest, as has been the case with other trade agreements including the latest Comprehensive Economic and Trade Agreement with the UK,” the statement said.
Commenting on Trump’s announcement, President of prominent Industry body FICCI Harsha Vardhan Agarwal termed the American decision as “unfortunate”.
“FICCI is disappointed by the decision taken by the U.S. to levy 25% tariff on exports from India and impose secondary sanctions,” he said.
“While this move is unfortunate and will have a clear bearing on our exports, we hope that this imposition of higher tariffs will be a short-term phenomenon and that a permanent trade deal between the two sides will be finalized soon,” Agarwal added.
“India and U.S. have a long-standing partnership, which is strengthened by our deepening engagement across an array of areas from technology to defence to energy and advance manufacturing.
“There is a lot our two countries can achieve together, and FICCI is confident that following the detailed deliberations that are currently underway, we will see beneficial outcomes for both countries when the contours of the final trade agreement will emerge,” the FICCI president added.
According to sources, India is paying a price for buying energy and arms from Russia.
It is pertinent to mention that India has bought crude oil from Moscow after it dropped prices – a bargain buy for a country with massive energy needs but a limited budget.
India’s decision to buy oil from Russia did not go well with the US which has been unhappy over Putin’s war against Ukraine.
It can be recalled that India’s External Affairs Minister S Jaishankar has repeatedly told critics the country’s purchase of oil is guided by market demand and not political strategy. (BVI)
