India believes 50% tariffs unjustified, bats for trade deal
New Delhi, Aug. 28 -- India believes the Trump administration's doubling of US tariffs on Indian goods to 50%, including a 25% penalty for purchasing Russian crude oil, is "unjustified" and has kept the door open for negotiations aimed at a trade deal, people familiar with the matter said on Wednesday.
US President Donald Trump's 25% punitive tariff due to India's purchases of Russian oil kicked in on Wednesday, adding to a 25% reciprocal tariff on Indian products. The new penalties took total US duties to as much as 50% for goods such as garments, gems and jewellery, footwear, furniture, and chemicals.
The tariffs are "unjustified" and the Indian side's response to the actions of the Trump administration has been restrained and responsible, the people said on condition of anonymity. Contacts between the two sides are continuing in order to reach an understanding and to ultimately agree on a trade deal, one of the people said.
In all these contacts, the Indian side will not compromise on the interests of its farmers, small producers and micro, small and medium enterprises (MSMEs), a second person said. "We believe issues will be resolved in negotiations, but there will be no going back on our red lines," he said.
There was no official reaction to the 25% punitive tariff from the commerce ministry or the external affairs ministry.
The people also said it was unjustified and unacceptable that the US had opted to penalise India for buying oil from Russia when no such action had been taken against larger purchasers of Russian crude, such as China.
"The punitive tariff for buying Russian oil came as a bolt from the blue as it was not part of the terms of reference (TOR) agreed on by the two sides in April for the trade negotiations," the second person said, adding that the Indian side hopes this 25% tariff is temporary and may be ended bilaterally.
The people said it was unusual that the US has opted to penalise India for trading with Russia when the Trump administration is seeking to improve relations with Russian President Vladimir Putin. "The US is also working to mend fences with China, for which the US extended its tariff truce for 90 days even though it buys large volumes of Russian oil," a third person said.
US Census Bureau data says India-US two-way trade in goods was worth $129 billion in 2024....
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