MEA downplays tariff row, says India-US relationship built on solid ground

India and the United States continue to share a “comprehensive global strategic partnership anchored in shared interests, democratic values, and robust people-to-people ties,” the Ministry of External Affairs (MEA) said on Friday, as fresh US tariffs triggered renewed trade tensions between the two countries.

Responding to a question during the weekly media briefing, MEA spokesperson Randhir Jaiswal said, “This partnership has weathered several transitions and challenges. We remain focused on the substantive agenda that the two countries have committed to and are confident that the relationship will continue to move forward.”

Trump slaps blanket 25% tariff on Indian goods

US President Donald Trump, through an executive order signed on July 31, imposed a flat 25 per cent tariff on all goods from India, with no product-level exemptions, according to a report by the Global Trade Research Initiative (GTRI). The order will remain in force until a bilateral trade and security agreement is reached, and a subsequent order is issued by the US President.

The GTRI described this move as one of the “toughest trade actions” taken by the US against a major trading partner in recent years. The flat tariff will take effect from August 7 and will be levied in addition to standard MFN (most-favoured nation) duties.

Critical sectors like pharma, smartphones to be hit hard

India’s exports in key sectors such as petroleum products ($4.1 billion), smartphones ($10.9 billion), and pharmaceuticals ($9.8 billion) are expected to take a major hit due to the lack of exemptions. Other sectors like engineering goods, electronics, and textiles will also feel the impact.

GTRI estimates show that India's total goods exports to the US could decline by nearly 30 per cent, from $86.5 billion in FY2025 to $60.6 billion in FY2026.

Trump cites high Indian tariffs, Russia ties as reason

Earlier this week, Trump announced a separate 25 per cent reciprocal tariff on Indian goods and additional penalties over India’s continued energy trade with Russia. In a post on Truth Social, he wrote, “India will be paying a tariff of 25 per cent,” starting August 1.

He also warned of secondary tariffs of up to 100 per cent on countries continuing to buy Russian energy, unless Russia calls a ceasefire in Ukraine. While calling India a “friend,” Trump accused New Delhi of having “the most strenuous and obnoxious non-monetary trade barriers of any country,” and claimed India buys “a vast majority” of its military equipment from Russia.

India began talks early, but deal remains elusive

India was among the first countries to initiate trade negotiations with Washington to address the tariff dispute. Trump had repeatedly signalled optimism, stating as recently as last week that a deal was imminent.

However, his latest move suggests a hardening stance ahead of the upcoming US elections. “ALL THINGS NOT GOOD! INDIA WILL THEREFORE BE PAYING A TARIFF OF 25 per cent, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST,” Trump wrote, ending his post with “MAGA” (Make America Great Again).