MUMBAI (Reuters) -U.S. President Donald Trump issued an executive order on Wednesday imposing an additional 25% tariff on goods from India, saying the country directly or indirectly imported Russian oil.
The additional tariffs mean India will face the highest levy along with Brazil, putting it at a significant disadvantage against regional competitors such as Vietnam and Bangladesh.
The tariffs are scheduled to kick in 21 days from the date of the executive order.
WENDY CUTLER, VICE PRESIDENT, ASIA SOCIETY POLICY INSTITUTE, WASHINGTON
Regrettably, the U.S.-India dispute is escalating, with the President now threatening an additional 25 percent tariff. This will essentially cut off most Indian exports to the U.S.
This turnaround in bilateral relations has occurred quickly and neither side can afford to be at odds with each other.
Beijing is most probably welcoming these developments and may take modest steps now to improve its relations with Delhi. It’s time for U.S. and Indian officials to try to work out their differences in private.
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, WISCONSIN
There may be more symbolism than substance to the extra 25% tariff on imports from India. The duty does not come into effect for 21 days. That’s quite a wide window to provide an off-ramp.
There are also a lot of exceptions where it might be easier to specify which goods the tariffs apply to rather than those that are excemted. That could explain why the market didn’t respond much to the announcement.
COLIN SHAH, MANAGING DIRECTOR, KAMA JEWELRY
The additional duty imposition of 25% to the existing tariff is unfortunate and a major blow to the overall Indian exports ecosystem, especially the gems & jewellery sector. As a result, this will lead to a sharp rise in duty for studded gold jewellery exports from India, leading to a further massive decline in Indian jewellery exports to one of the biggest consumer markets.
A. PRASANNA, CHIEF ECONOMIST, ICICI SECURITIES PRIMARY DEALERSHIP, MUMBAI
The additional tariff will come into effect after 21 days but it will be on top of the earlier 25% so the total 50% rate will be a big negative for Indian exports. However some key segments like electronics and pharma continue to be exempt from this additional rate.
At 50% rate, many Indian exports will face a handicap versus countries that are in the 15-30% bracket.
SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM
While Trump’s order gives another 21 days for a deal to break through, in case it does not, we will have to significantly lower FY26 GDP growth forecast to below 6%, baking in a 40-50 bps hit. This would be double our earlier estimates (of GDP hit from higher tariffs).
TERESA JOHN, LEAD ECONOMIST, NIRMAL BANK INSTITUTIONAL EQUITIES, MUMBAI
The pressure is mounting on India to come to a trade agreement. India may agree to significantly reduce Russian purchases over a phased manner and diversify to other sources.
GAURA SEN GUPTA, ECONOMIST, IDFC FIRST BANK, MUMBAI
Post this order bilateral tariffs will rise to 50%, which would be the highest applied from August onwards. This definitely increases the downside risk to 2025-26 GDP estimate.
For now if the tariffs persist till March 2026 total downside risk is estimated at 0.3% to 0.4%.
MANOJ MISHRA, PARTNER, GRANT THORNTON BHARAT, NEW DELHI
India’s merchandise exports to the U.S. at around $87 billion in FY25 account for only about 2% of India’s GDP, making it a modest share of the overall economy. The impact, though notable, is unlikely to be severe.
This development reinforces the need to diversify export markets, reduce reliance on any single trading partner, and capitalise on India’s expanding FTA network to build long-term trade resilience and sustain export growth.
MAYURESH JOSHI, HEAD OF EQUITY RESEARCH -INDIA, WILLIAM O’NEIL
While markets have already started pricing in the risk of a sharp tariff hike, a near-term knee-jerk reaction is inevitable—unless there’s swift clarity or a breakthrough in negotiations.
India’s crude oil imports have remained diversified — we’ve been sourcing from the U.S., among others, not just Russia. Russia is just one slice of our broader crude basket.
So, structurally, I don’t foresee a major disruption for Reliance or the OMCs. That said, the broader sentiment—especially around export-driven sectors—could take a short-term hit.
(Reporting by Nikunj Ohri in New Delhi, Swati Bhat and Rajendra Jadhav in Mumbai; Aleef Jahan, Hritam Mukherjee, Bharath Rajeswaran and Vivek Kumar M in Benguluru; David R Brunnstrom in Washington; Writing by Ira Dugal; Editing by Toby Chopra, Alexandra Hudson, Gareth Jones)
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