Donald Trump Announces Tariffs, Penalty On India LIVE Updates: US President Levy 25% Trade Tax Plus Penalty For Russian Imports

The Government has taken note of a statement by the US President on bilateral trade. The Government is studying its implications: Govt of India

"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. The Government attaches the utmost importance to protecting and promoting the welfare of our 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."

Commenting on US President Donald Trump’s announcement to levy a 25% tariff as well as secondary sanctions on exports from India starting from August 1, 2025, Mr Harsha Vardhan Agarwal, President, FICCI said, “FICCI is disappointed by the decision taken by the U.S. to levy 25% tariff on exports from India and impose secondary sanctions. 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 finalised soon.”

“India and the 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 advanced 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 emerge,” he added.

India has been actively negotiating a BTA with the US since the start of the year, and we understand that there have been some specific demands from the US side which are not in our national interest and therefore the Indian government has not given in to those demands from the US. Also, the US team is coming to India in the latter half of August to further discuss the BTA. We are hopeful that the two sides will make progress in their discussions and complete the negotiations by September or October 2025.

The US is an important market for Indian exporters, both in goods and in services, and the industry would like to have a long-term permanent agreement with the country. As our Hon’ble Commerce and Industry Minister has emphasised that India would prioritise national interests over meeting the deadlines in trade negotiations. The aim is to secure a beneficial pact rather than a hurried deal that gives short-term benefit but may result in adverse outcomes in the long term.

It is also important to note that India offers a large market for U.S. businesses, and many of the large companies from the U.S. benefit from leveraging the demand as well as the skills and talent pool that we have to offer.

In respone to US President Donald Trump's 25 per cent tariff imposition on India, Gift Nifty declined as much as 0.70 per cent to 24,680 level. The tariff announcement was made by Trump on his Truth Social handle and the post said that the tariff and penalty becomes effective from August 1.

US negotiators pushed for access to India’s agricultural and dairy markets, but India resisted imports of wheat, corn, rice, and GM soybeans to protect farmer livelihoods.

The US has long criticised India’s agri tariffs (avg. 39%), with specific rates like 45% on vegetable oils and 50% on apples and corn as unfair barriers.

US exports to India—worth $42 billion in 2024 in manufacturing and energy (LNG, crude, coal)—could face retaliatory tariffs from New Delhi.

The move threatens the Modi-Trump commitment to boost bilateral trade to $500 billion by 2030 from $191 billion in 2024.

Reliance, Sun Pharma, Hindalco, Motherson, and Dixon Technologies are among the top Indian firms dependent on US exports.

India exported $12.6 billion in electronics to the US last year; higher tariffs could hurt this rapidly growing segment.

Indian drugmakers and agrochemical exporters could be hit hardest, especially if the US raises duties on sensitive products.

Pharmaceuticals, electronics, textiles, and gems and jewellery are among the sectors most exposed to the US tariff decision.

"Despite the unpredictable policy making of the US, the market was expecting a tariff deal to work out as longer-term US-India strategic interests are aligned. Markets will hope for a “TACO” trade if better senses prevail.

China is defying US / UN sanctions on Iran Oil, Myanmar and Russia Trade and North Korea Support. Size and the competitiveness of the economy have their advantages. I hope and pray that this unilateral imposition should accelerate Indian policy-making to be growth-supportive. Our biggest deterrence continues to remain GDP size and competitiveness," Nilesh Shah, MD, Kotak Mahindra AMC.

India enjoys a $46 billion trade surplus with the US, which is now at risk if tariffs reduce export competitiveness.

The US accounts for 18% of India’s exports and remains its biggest trade partner, with $129 billion in goods trade recorded in 2024.

Both sides have already held five rounds of negotiations but remain deadlocked on tariffs, market access, and regulatory barriers.

Indian officials are working to secure a comprehensive bilateral trade agreement by October, despite Trump’s tough stance.

India plans to resume broader trade talks with the US after the tariff deadline, aiming for progress in August when a US delegation visits.

Earlier, officials in New Delhi indicated that India is prepared to accept tariffs of 20%-25% if no deal is signed before August 1.

Trump pointed out India’s continued defence and energy purchases from Russia, calling them unacceptable during the Ukraine conflict.

Trump accused India of imposing “strenuous and obnoxious non-monetary trade barriers,” making it difficult for US companies to compete.

He described India’s tariffs as “among the highest in the world” and said they had restricted US business access to the Indian market for years.

Trump made it clear that the August 1 deadline “stands strong and will not be extended,” signaling a hard stance in negotiations with India.

Trump warned that India would also face a penalty for continuing to buy oil from Russia, linking energy trade to geopolitical concerns over the Ukraine war.