India’s Response to US’s Additional Tariffs: A Stand for Sovereignty

Trump imposed additional 25% tariffs on India taking the effective tariff to 50%, signed an executive order. New additional tariff will be effective from 27 August 2025. Trump remarked – India’s continued purchase of Russian crude a concern of national security for US. Trump blames that India’s continued purchase of crude from Russia is helping Russia in war financing against Ukraine.

US earlier had imposed a 25% tariff from 7 August on Indian products. Now, they continue with an additional 25% tariff on Indian exports effective from August 27, 2025.

India Responds Firmly

India’s stand on Trump’s action has been firm calling US and EU tariff actions on India unjustifiable and unreasonable. India highlighted west hypocrisy by explaining the stance. US and EU want India to not purchase crude from Russia. However, they themselves are trading with Russia. The commodities that the west is purchasing cannot be considered important for ensuring national security.

India remarked that it will take all possible and justified actions in the national interest.

Responding to US’s decision, the Ministry of External Affairs (MEA) said – “It is extremely unfortunate. The US should not choose to impose additional tariffs on India. These actions are also being taken by several other countries in their own national interest.”

MEA reiterated that India would continue to act in its own national interest. India will defend its sovereign right to make energy decisions independently.

No Major Impact on Domestic Inflation

Reserve Bank Governor Sanjay Malhotra on Wednesday explained that US tariffs will not heavily affect domestic inflation in India. He emphasized this point. This will remain the case until India imposes retaliatory tariffs. However, he does not see such measures forthcoming.

Deputy Governor Poonam Gupta noted that food items make up 50% of India’s consumer price inflation basket. These items have minimal exposure to global disruptions. She also pointed out that the basket contains a significant number of non-tradable items. These items are largely unaffected by international factors such as tariffs.

Sectors Hit Hard by Tariff Wars

Exporters of India are facing major havoc in this unstable time. Sectors like textiles, gems and jewels, marine products, and leather are expected to be hit the hardest. These sectors are majorly led by MSMEs.

Sectors Exempted

Exemption tariffs are imposed on items that are already subject to sector-specific tariffs. These include items such as steel and aluminum. Other potentially impacted categories include pharmaceuticals. Despite the prevailing volatility, India’s position is clear. It remains resolute in prioritizing its own energy needs by continuing imports from Russia. These measures by the United States could potentially create strains in future Indo-US relations.

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