Global Politics Explainer

CWA # 1787
Global Politics Explainer
Trump’s 50 per cent tariffs on India:
What is the background? And what does it mean?

Abhiruchi Chowdhury
11 August 2025

Photo Source: AFP

What happened?
On 6 August, US President Donald Trump authorized an executive order to impose an extra 25 per cent duties on Indian exports to the US. As per the White House, the decision was taken as a response to New Delhi’s continual purchase of oil from Russia. The Ministry of External Affairs, India called the imposition of tariffs as “unfair, unjustified, and unreasonable.” The total 50 per cent tariffs are set to apply from 27 August. 

On 7 August, PM Modi said “India will never compromise on the wellbeing of its farmers, dairy and, fishermen.”  

On the same day, Trump refused to hold any discussion with India regarding trade unless US’s concerns regarding India’s purchase of Russian oil was addressed. 

What is the background?
First, India’s trade deal negotiations with the US. In February, Modi visited Washington DC. During his visit, the two countries decided to increase bilateral trade volume to USD 500 billion by 2030. He also agreed to increase energy imports from the US. In March, India’s Minister of Commerce and Industry Piyush Goyal met US Secretary of Commerce Howard Lutnick and US Trade Representative Jamisen Greer. As per New Delhi, discussions regarding the bilateral trade agreement were going in the right direction. In April, US Vice President JD Vance visited India, after which New Delhi informed that a potential deal could be signed before 9 July. In June, Trump claimed that a “big trade deal” with India would soon be inked. In June, as per Reuters, negotiations between the two countries took a hit after New Delhi refused to open up its markets for agricultural imports. 

Second, India-US trade relations. In 2024, the total bilateral goods trade amounted USD 128.9 billion. The US exported goods worth USD 41.5 billion, whereas it imported goods amounting USD 87.3 billion from India. The US trade deficit with India in 2024 grew by 5.9 per cent in comparison to 2023. Since the 2021-22 financial year, US has been India’s largest trading partner. India’s 98 per cent solar module, 88 per cent of cement and artificial stones, 80 per cent of cotton linen and plastic-coated textiles, and 80 per cent of sea food exports goes to the US. 

Third, India’s reluctance in reducing import duties on agricultural products. American farm companies over the past few years are wanting to sell their surplus in India. Two major issues are associated with the import of American dairy products and genetically modified (GM) crops. First, as per directives for import of dairy products in India, the same should be derived from cattle that does not consume blood meal- a powdered protein obtained from poultry blood. The exporters in the US see this as a non-tariff hindrance. Second, US wants India to allow the import of genetically modified crops. However, most of the crops such as mustard, brinjal are indigenous to India and the government might see a backlash from the public if it decides to import GM crops. Further, Indian farmers will also be unable to export GM crops produce to Europe.   
  
Fourth, New Delhi dismissing Trump’s role in negotiating ceasefire between India and Pakistan. Trump had continually asserted that he compelled India and Pakistan for agreeing to a ceasefire. Trump’s claims have been vehemently dismissed by New Delhi. On 17 June, Trump held a phone conversation with Modi. After the conversation, India’s Foreign Secretary Vikram Mistri asserted that Modi had clearly conveyed his stance to Trump about US not having any role in negotiations of ceasefire between India and Pakistan. Further, he stated that India would dismiss any kind of mediation from the third parties. New Delhi continues to maintain that ceasefire discussions took place among the military leaders of India and Pakistan. As per Bloomberg, after the phone conversation, strain in bilateral relations exacerbated.
 
What does it mean?
First, a combination of at least three issues has led to the increase in Trump’s tariffs on India namely- India not wanting to open its market for US farm products, India continuing to buy Russian oil despite US President’s repeated warnings, and the current government refusing to accept Trump’s claims on negotiating ceasefire between Pakistan and India.  

Second, the imposition of tariffs is not good news for those American industries which heavily depend upon cheap Indian imports. Three per cent imports from India arrive into the US from sectors in which India has a market share of more than 50 per cent. The tariff increase is also equally distressing for Indian exporters who heavily relied on the American market. American industries would probably look for cheaper alternatives in sectors where India does not have a considerable market share. 

Third, the importing of GM crops would have primarily catered to the interests of big farming companies in the US. The decision to allow the import of GM crops would have had severely hit the organic farmers in India. For the organic farmers in India, it would have been impossible to stop the inter-mixing of GM and non-GM crops, which means they no longer could have claimed of producing organic crops. 

About the Author
Abhiruchi Chowdhury is research assistant at the National Institute of Advanced Studies (NIAS).

PREVIOUS COMMENTS

February 2026 | CWA # 1959

Yesasvi Koganti | Yesasvi Koganti is an undergraduate student from Madras Christian College, Chennai.

UK and China
February 2026 | CWA # 1957

R Preetha | R Preetha is pursuing post-graduation in the Department of International Studies, Stella Maris College, Chennai, and is a Research Assistant at the National Institute of Advanced Studies, Bengaluru.

The India–US interim trade framework
February 2026 | CWA # 1956

Lekshmi MK | Lekshmi MK is pursuing post-graduation in the Department of Political Science, Madras Christian College, Chennai, and is a Research Assistant at the National Institute of Advanced Studies, Bengaluru.

End of the New Strategic Arms Reduction Treaty (START)
State of Global Politics 2025
December 2025 | CWA # 1931

Padmashree Anandhan

NATO Summit 2025
State of Global Politics 2025
December 2025 | CWA # 1924

Padmashree Anandhan

NATO Summit 2025
This Week in History
August 2025 | CWA # 1801

R Preetha

28 August 1963
TWTW note
August 2025 | CWA # 1780

Abhiruchi Chowdhury

Trump tariffs:
This Week in History
August 2025 | CWA # 1778

Lekshmi MK

28 July 1914
TWTW Note
June 2025 | CWA # 1694

Aashish Ganeshan

The US:
CW Note
May 2025 | CWA # 1689

Padmashree Anandhan

Ukraine
CW Note
May 2025 | CWA # 1688

Ayan Datta

Gaza
CW Note
May 2025 | CWA # 1675

Lekshmi MK

Turkey:
CW Note
May 2025 | CWA # 1673

Padmashree Anandhan

Ukraine:
TWTW Note
May 2025 | CWA # 1667

R Preetha and Brighty Ann Sarah

East Asia:
NIAS Global Politics Database
March 2024 | CWA # 1251

NIAS Africa Team

Africa This Week
NIAS Global Politics Database
February 2024 | CWA # 1226

NIAS Africa Team

Africa This Week
The World This Year
December 2023 | CWA # 1189

Hoimi Mukherjee | Hoimi Mukherjee is an Assistant Professor at the Department of Political Science in Bankura Zilla Saradamani Mahila Mahavidyapith.

Chile in 2023: Crises of Constitutionality
The World This Year
December 2023 | CWA # 1187

Aprajita Kashyap | Aprajita Kashyap is a faculty of Latin American Studies, School of International Studies at the Jawaharlal Nehru University New Delhi.

Haiti in 2023: The Humanitarian Crisis
The World This Year
December 2023 | CWA # 1185

Binod Khanal | Binod Khanal is a Doctoral candidate at the Centre for European Studies, School of International Studies, JNU, New Delhi.

The Baltic: Energy, Russia, NATO and China
The World This Year
December 2023 | CWA # 1183

Padmashree Anandhan | Padmashree Anandhan is a Research Associate at the School of Conflict and Security Studies, National Institute of Advanced Studies, Bangaluru.

Germany in 2023: Defence, Economy and Energy Triangle
The World This Year
December 2023 | CWA # 1178

​​​​​​​Ashok Alex Luke | Ashok Alex Luke is an Assistant Professor at the Department of Political Science at CMS College, Kottayam.

China and South Asia in 2023: Advantage Beijing?
The World This Year
December 2023 | CWA # 1177

Annem Naga Bindhu Madhuri | Annem Naga Bindhu Madhuri is a postgraduate student at the Department of Defence and Strategic Studies at the University of Madras, Chennai.

China and East Asia
The War in Ukraine
October 2023 | CWA # 1091

Annem Naga Bindhu Madhuri

Issues for Europe
IPRI Quarterly Forecasts I Triggers, Trends, and Trajectories
July 2023 | CWA # 1012

Bibhu Prasad Routray

Myanmar continues to burn
2022: The World This Year
December 2022 | CWA # 879

Padmashree Anandhan

The Ukraine War
Europe: Heatwaves, Wildfires, Droughts, and Ice Melt in Alps
November 2022 | CWA # 838

Rishma Banerjee

Tracing Europe's droughts
NIAS Africa Weekly
March 2022 | CWA # 705

NIAS Africa Team

In Focus: Libya
The World This Week: 150th Issue
December 2021 | CWA # 630

GP Team

Europe in 2021
Pakistan Reader
October 2021 | CWA # 588

Abigail Miriam Fernandez

TLP is back again
NIAS Fortnightly on Science, Technology & International Relations
August 2021 | CWA # 528

STIR Team

Space Tourism
Science, Technology and International Relations
September 2019 | CWA # 162

Lakshman Chakravarthy N

5G: A Primer
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 71

Mahesh Bhatta | Centre for South Asian Studies, Kathmandu

Nepal
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 70

Nasima Khatoon | Research Associate, ISSSP, NIAS

The Maldives
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 69

Harini Madhusudan | Research Associate, ISSSP, NIAS

India
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 68

Sourina Bej | Research Associate, ISSSP, NIAS

Bangladesh
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 67

Seetha Lakshmi Dinesh Iyer | Research Associate, ISSSP, NIAS

Afghanistan