Trump announces 25% tariffs on India; govt says it will protect farmers, entrepreneurs, MSMEs

New Delhi: United States President Donald Trump on Wednesday announced a 25 per cent tariffs on India, effective August 1. In a post on his social media platform Truth Social, Trump said that while India is a friend, it must now face penalties for its continued purchases of Russian military equipment and energy.

Responding to the announcement, the Indian government said it has taken note of Trump's statement and is studying its implications, while reaffirming its commitment to a fair and mutually beneficial trade agreement with the US.

"Remember, while India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high—among the highest in the world—and they have the most strenuous and obnoxious non-monetary trade barriers of any country," Trump wrote.

He further noted that while most nations are pushing to end the war in Ukraine, countries like China and India have increased energy purchases from Russia, indirectly supporting Moscow's war efforts.

"They have always bought a vast majority of their military equipment from Russia and are Russia’s largest buyer of energy, along with China—at a time when everyone wants Russia to stop the killing in Ukraine. All things not good! India will therefore be paying a tariff of 25%, plus a penalty for the above, starting on August 1," Trump said.

According to reports, the US and India remain locked in a dispute over agricultural and dairy market access. While Washington has long sought to open Indian markets for its companies, New Delhi has pushed back, aiming to protect domestic farmers and local producers. Currently, India faces a 10 per cent tariffs on most products exported to the US.

The Indian government in a statement said that it has taken note of Trump's tariffs adding that it is studying its implications.

Reacting to the announcement, the Indian government issued a measured statement, confirming it had taken note of the US President's remarks and was analysing the impact.

"The Government has taken note of a statement by the US President on bilateral trade. The Government is studying its implications,” the official statement said. It added that New Delhi remains committed to concluding a "fair, balanced and mutually beneficial" trade agreement with Washington.

"India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective," the government said.

"The Government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs. The 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 the UK."

Earlier on Tuesday Trump, aboard Air Force One while returning from a visit to Scotland, had hinted that he would impose tariffs on India. Talking to reporters, he said, "India has been a good friend, but India has charged basically more tariffs than almost any other country,” Trump said aboard Air Force One as he returned to Washington from a five-day visit to Scotland. "You just can’t do that."

Despite the new tariff hike, India remains better positioned than Bangladesh in the textiles market, which faces a 35 per cent tariff. However, it will be at a disadvantage compared to competitors such as Vietnam (20 per cent), Indonesia (19 per cent), the EU and Japan (15 per cent each), and the UK (10 per cent). Chinese imports into the US currently face a 30 per cent customs duty.

Meanwhile, reacting to the Trump tariffs, Congress MP Ujjwal Raman Singh said, "The people of India will not bow down before America. We have been saying that India's foreign policy has failed, and now we are seeing our economic policy also failing."