Announcement by U.S. President Trump (Wednesday):
- 25% tariff on all Indian imports starting August 1.
- Includes an additional penalty (not yet specified).
Relevance : GS 2(International Relations)
Reasons Cited by Trump:
- India’s high tariffs and non-monetary trade barriers.
- India’s continued purchase of military equipment and energy from Russia.
- Criticism of India’s role as a major buyer from Russia during the Ukraine war.
India’s Response (Ministry of Commerce):
- “Studying implications” of U.S. announcement.
- Will take all necessary steps to protect national interest.
Trade Negotiations Status:
- India–U.S. Bilateral Trade Agreement expected by Fall 2025 (still under negotiation).
- A smaller “mini-deal” to reduce retaliatory tariffs has likely failed.
Past Context:
- Trump had earlier threatened 26% tariffs on India.
- Current move slightly lower at 25%, but penalty adds uncertainty.
U.S. Position (as per Trump on Truth Social):
- India is a “friend,” but trade has been low due to high Indian tariffs.
- Accused India of having the “most strenuous and obnoxious” trade barriers.
