Trump Doubles U.S. Tariffs on India to 50% Over Russian Oil Imports

President Donald Trump signed an executive order imposing an additional 25% tariff on most Indian imports, raising the total U.S. tariff burden on India to 50%. The order specifically cites India’s continued purchase of Russian oil as the justification, framed as a national security concern. The additional duty becomes effective 21 days from August 7, making August 27 the start date for the full 50% rate.

The expanded tariff burden makes India one of the highest‑taxed trading partners globally under Trump’s tariff regime, alongside countries like Brazil. While the second 25% “penalty” targets Russia‑linked trade, the primary 25% was already part of earlier reciprocal national tariffs announced in early August. Despite exemptions for certain sectors like steel, aluminium, and pharma under prior rules, the new penalty covers a broad range of goods 

📌 Key Details:

• New Tariff Imposed: +25% on top of existing 25% → total 50% for most Indian goods

• Effective Date: August 27, 2025 (21 days after order issuance)

• Trigger: India’s continued imports of Russian oil (deemed a national security threat)

• Targeted Sectors: Broad range including textiles, auto parts, chemicals, electronics — excluding some previously exempt items

• Diplomatic Fallout: India labeled the move “unfair, unjustified and unreasonable” and warned of WTO-based response options 

🏭 Policy & Business Impact:

1. Trade and Export Shifts

• Analysts expect U.S.-bound exports from India could decline by 40–50%, with goods priced at parity or lower becoming uncompetitive in the U.S. market

• Exporters in textiles, gems & jewellery, electronics, and auto components may shift manufacturing to low‑tariff countries like Dubai or Mexico for re-export to the U.S. 

2. Economic Strategy

• India is doubling down on a “swadeshi” or self-reliance initiative, pushing diversification across Europe, ASEAN, and other markets to reduce reliance on U.S. demand The

• The government is reviewing concessions in agriculture and dairy as negotiation levers, while considering phased adjustments in its Russian crude intake if matching U.S. pricing becomes viable 

📉 Expected Effects on Indian Stock Market:

All outcomes below are probable scenarios, based on historical reactions and expert commentary—not guaranteed events.

• Export‑Linked Sectors Under Pressure: Shares of textile, pharmaceutical, gem & jewellery, electronic and auto‑component producers may see sharp declines on anticipated demand loss.

• Currency Volatility: The Indian rupee could weaken moderately as export earnings slow and foreign portfolio flows turn cautious.

• Investor Risk-Off Mode: Foreign institutional investors may reduce exposure to India amid rising global trade friction, potentially leading to downward pressure on indices like the Nifty.

• Relative Strength in Domestic Stocks: Sectors focused on internal consumption—such as FMCG, retail, and infrastructure—might outperform if global-facing sectors suffer.

• Bond Flows Could Turn Supportive: In case of risk aversion, Indian government debt yields may soften as investors seek safe-haven assets.

Trump’s latest tariff escalation opens a new phase in U.S.–India economic relations, signaling broader geopolitical implications. The move underscores how energy security decisions—especially linked to Russia—are now deeply intertwined with global trade policy shifts.

source:-white house,economic time

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