US President Donald Trump has announced a 25% tariff on goods imported from India, effective August 1, 2025, accompanied by additional penalties related to India’s continued purchase of Russian oil and weapons. Experts warn this move could slow India’s GDP growth by up to 0.5 percentage points, hitting key export sectors like textiles, pharmaceuticals, and gems and jewelry.
The announcement spooked Indian markets, with major indices opening sharply lower and export-heavy stocks leading the decline. Analysts note that this tariff is steeper than those imposed on other Asian trade partners, potentially making Indian products less competitive in the US market.
Trade tensions stem from a $45 billion US trade deficit with India, and ongoing negotiations have yet to yield a deal. While both countries aim for further talks in August, the new tariffs and penalties place immediate pressure on India’s economic outlook and export-driven industries.
