Why did the US impose additional tariffs on Indian imports in 2025?

The US imposed additional tariffs because India continues to import Russian oil directly and indirectly, which violates the 2022 executive order banning products of Russian origin.

How much is the new tariff on Indian imports?

The new tariff adds 25% on top of existing duties, bringing the total tariff under the International Emergency Economic Powers Act to 50% of the goods' value.

When do the new US tariffs on Indian goods take effect?

The additional tariffs take effect on August 27, 2025, for goods brought into the US from India for sale or taken out of storage for sale.

Are any Indian products exempt from the new tariffs?

Yes, products already covered under section 232 of the Trade Expansion Act of 1962 or listed in Annex II of Executive Order 14257 are exempt, including certain metals, automobiles, and critical minerals.

What is Annex II in Executive Order 14257?

Annex II lists products exempt from the additional tariffs, such as steel, aluminum, automobiles, auto parts, copper, pharmaceuticals, semiconductors, lumber, critical minerals, and energy products.

How will the new tariffs affect trade between the US and India?

The tariffs are expected to escalate trade tensions, impacting exporters in India and importers in the US, while forcing both sides to adapt to evolving regulations.

US Imposes 25% Tariff on Indian Imports

On August 6, 2025, US President Donald Trump signed an executive order imposing additional tariffs on certain products imported from India. The decision to impose additional tariffs was justified by the fact that India imports Russian oil both directly and indirectly, which opposes the US executive order from 2022 prohibiting the importation of certain products of Russian origin, including crude oil and petroleum products.

Impact of the Imposed Additional Tariffs

A new 25% import tariff is added on top of any other existing taxes, fees, or tariffs, including those introduced in April 2025. As a result of the imposed additional tariff on certain imports from India to the US, the total tariff under the International Emergency Economic Powers Act is now 50% of the goods’ value.

However, the 25% additional tariff will not apply to products already covered by current or future measures under section 232 of the Trade Expansion Act of 1962, or to products that appear on the exemption list in Annex II of Executive Order 14257.

Some of the products covered by Annex II include steel and aluminum products already subject to tariffs under previous proclamations, as well as automobiles and auto parts that are already facing duties. Other specified products include copper, pharmaceuticals, semiconductors, lumber, certain critical minerals, and energy products.

Nevertheless, starting from August 27, 2025, goods brought into the US from India for sale or taken out of storage for sale will be subject to additional tariffs. However, if the goods subject to these tariffs are shipped before August 27 or are brought into the US before one minute after midnight on September 17, 2025, Eastern time, they are not subject to additional tariffs.

Conclusion

The effect of the adopted measure, which represents a significant escalation in trade restrictions tied to geopolitical concerns over Russian oil imports, will be felt on both sides of the trade relationship, impacting exporters in India and importers in the United States. Whether India will yield to pressure and align its policies with the US sanctions policy remains to be seen. Nonetheless, businesses on both sides will need to carefully navigate these changes to mitigate disruption and comply with evolving regulatory requirements.

Source: EY, The White House