Veriton Investment

US Takes Steps to Hit India With 50% Tariff From Wednesday

(Bloomberg) -- The Trump Administration outlined plans to implement a 50% tariff on products from India in a draft notice published Monday, the latest signal that the White House plans to push ahead with the heightened levies as efforts to broker a peace deal between Russia and Ukraine appear to be stalling.

The notice posted by the Department of Homeland Security said that the increased levies would hit Indian products “that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on August 27, 2025.”

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US President Donald Trump announced plans earlier this month to double tariffs on Indian goods from 25% to 50% over its purchases of Russian oil, in hopes of pressuring Russian President Vladimir Putin to the negotiating table to end the war against Ukraine.

The Indian government has decried the so-called secondary tariffs as unfair, while holding out hope that a breakthrough in the peace talks could remove the need for the levies. India’s External Affairs Minister Subrahmanyam Jaishankar said Saturday that trade negotiations between New Delhi and Washington continue, while defending the country’s purchase of discounted Russian crude. He added that New Delhi has had no discussions on the energy trade with the Trump administration since it took office in January.

India has also drawn clear red lines in trade talks, rejecting Washington’s demand for greater access to its agriculture market. Prime Minister Narendra Modi has vowed to protect farmers, herders, and fishermen, even at great personal cost.

While refiners in India are planning to trim their purchases of Russian crude in the coming weeks, a modest concession to Washington’s pressure, the country has no plans to sever its ties with Moscow. In recent days, Putin has spoken with Modi, who has prioritized outreach to Russia and China amid Trump’s tariff threats.

Modi’s government is also accelerating policy changes, including an overhaul of the consumption tax regime, to bolster confidence and growth while cushioning the impact of the tariffs.

With little indication that the additional tariffs will be delayed, Indian equities are likely to extend their rare underperformance against emerging-market peers. The NSE Nifty 50 Index fell as much as 0.9% in early trading on Tuesday amid a broad selloff in the region.

Two to Tango

Earlier this month, Trump met with Putin in Alaska and then with European leaders, including Ukraine’s Volodymyr Zelenskiy, at the White House. But his effort to arrange a face-to-face between Putin and Zelenskiy has so far failed to yield results.

Earlier Monday, Trump said the meeting hadn’t yet been scheduled because of Putin’s animosity toward Zelenskiy. He later said he wasn’t sure such a meeting would ever happen.

“That’s going to be up to them. It takes two to tango, I always say, and they should meet,” Trump said.

Trump also indicated that he could impose additional tariffs on Russian trading partners or sanctions targeting Moscow if there was no progress on a deal, saying there could be “very big consequences” if nothing happened in the coming weeks. The US has so far refrained from slapping similar sanctions on other major buyers of Russian oil, most notably China.

(Adds details of India’s reaction to higher tariffs.)