US President Donald Trump | Photocredit: Bloomberg
US President Donald Trump has announced mutual rates of 25 percent on Indian goods plus a non -specified fine for buying weapons and oil from Russia in response to New Delhi’s refusal to give in to requirements for radical tariff reductions in the current bilateral trade agreement negotiations.
Trump criticized India because of its high rates and “strenuous and annoying” non-trade barriers while on Wednesday he announced the mutual rates on his social media platform, Truth Social.
He said: “Remember, although India is our friend, we have done relatively few things with them over the years because their rates are far too high, one of the highest in the world, and they have the most strenuous and annoying non-monetary trade barriers of every country. Ukraine …”
India’s reaction
Trump’s statement was matched by the sharpness of the Indian reaction.
“India and the US Have Been engaged in negotiations on concluding a fair, balanced and mutual Beneficial Bilateral Trade Agreement over the Last Few months. We remain committed to that objective. The Government Attaches The Utmostance, Entreurs, and Promotion to Protecting and Promotion to Protection, And Mosting to Protection, And Mosting to Protection, And Mosting to Protection, And Mosting to Protection, And Mosting to Protection, And Most. 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, “said the Ministry of Commerce & Industry.
Trade position
The rates of Trump, which must be imposed from 1 August when his mutual tar liefdeadline expires, have exporters who will soon hope for a trade agreement. They disadvantage these rates not only to the disadvantage of competitors such as Vietnam and Indonesia, who will attribute around 20 percent rates, but the extra threat of a fine has created uncertainty, which can further harm things, exporters say.
Experts advise that India should not admit to the “arm-contraction” by the US and must continue to protect its sovereignty and at the same time mobilize developing countries in various international forums against the Unilateral movements of the US.
Such an insult to the sovereignty of India is completely unacceptable, said Biswajit Dhar of Council for Social Development.
“The Indian government has done the right one by not giving in poor by the US. It is one of the greatest economies and a growing economic power. India has to mobilize other developing countries on all international forums to fight against the unilateral movements of the US,” Dhar said.
India is not significantly worse off than countries that have signed deals with the US, pointed to Ajay Sriastava from Gtri. “The UK, the EU, Japan, Indonesia and Vietnam are now confronted with increased rates and have given drastic concessions in exchange – zero rates for American agricultural products, massive investment gaps and purchases of American oil, gas and weapons. India has not made such concessions,” he said.
Limbo rate
The US was the largest export destination in FY25 with shipments with a value of $ 86.51 billion. But it was good for less than one fifth of the total export of $ 437.42 billion.
The 25 percent rates for Indian goods place India on an advantage compared to countries such as Bangladesh, China, Sri Lanka and Cambodia, which are currently related to higher rates. But without clarity about the quantum of the fine, Indian exporters and American importers do not have a solid foundation to calculate land costs or to assess how the tariff burden can be absorbed, Ajay Sahai said Fieo.
“With BTA negotiations, the current impasse can be temporary in nature and we hope and pray that the sixth round of BTA interviews will witness a large breakthrough that leads to mutual affordable trade conditions,” said Mithileshwar Thakur, Secretary General, AEPC.
Published on July 30, 2025
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