New Delhi: US President Donald Trump's decision to impose 25% tariffs on India along with an additional penalty for trade deficit starting August 1, 2025 has triggered major concerns as it could impact various sectors. Experts say that agriculture, stones, chemicals, pharma, medical devices, electricals, and machinery industries are likely to be affected as these sectors may face extra US import taxes because India charges higher duties on the same products.

"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 said in a post on Truth Social. He also cited India's reliance on Russia for military equipment and energy as reason for imposing the tariff.

"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 1st. THANK YOU FOR YOUR ATTENTION TO THIS MATTER. MAGA!" (sic), the US President said.

Agriculture Economist Ashok Gulati told PTI that India's seafood exports, especially shrimps, and textile industries will be among the most-affected.“Ecuador,  which has lower tariff and lies closer to the US will gain. The advantage of India-UK free trade deal will be neutralised with the high US tariffs,” he added. According to reports, India's shrimp exports in the 2024-25 was valued at around USD 4.88 billion, and accounted for 66% of the total seafood exports.

Dairy products, such as ghee, butter, and milk, can get costlier. Edible oils, alcohol, wines, spirits, and electronic goods are some of the other products that can get get more expensive. However, if Trump imposes a similar tariff on India's competitors Ecuador and Indonesia, the ramifications of the tariffs on India could somewhat be nullified.

India-US Trade Talks Stalled

Meanwhile, the fifth round of trade negotiations between India and US had hit a roadblock over the issue of agricultural tariffs and India's reluctance to allow genetically modified soybean and maize, essentially open up the economy to US.  

US Trade Representative Jamieson Greer told reporters discussions with India have been constructive, and that New Delhi has shown interest in“opening portions of their market”. Meanwhile, India wants more market access to the US with respect to its competitors. Union Minister Piyush Goyal said,“All options are on the table, and we will see how it plays out, but what is important is to get preferential market access over our competitors, our peers.”

India is taking a cautious approach in its trade negotiations after the US-Japan trade agreement ran into serious differences over its interpretation. According to an ET report, both nations are at odds over the terms of the deal. US officials claim Japan has agreed to invest in the US, with 90% of the profits going to American taxpayers. However, Japanese representatives deny this, stating that no formal agreement has been signed.

Soon after Trump's announcement, Congress criticised the central government of having a failed foreign policy. "The country is now bearing the cost of Narendra Modi's 'friendship'. Modi campaigned for Trump, hugged him eagerly, posed for photos, and made it trend on social media. In the end, Trump still imposed tariffs on India. India's foreign policy has completely failed," Congress said on X.

Tariff Imposed: 25%Foreign Policy Failure: 100% twitter/80wE3rG7Nw

- Congress (@INCIndia) July 30, 2025

According to reports, Indian officials say that the tariffs would be temporary and that a deal will worked out soon as five rounds of talks have been completed. A team from Washington is scheduled to visit India in August for the next round of negotiations. The US continues to be India's largest trading partner, with bilateral trade amounting to 127.9 billion USD in 2024.

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