Given the key defence agreements it has signed with the United States, its membership of the anti-China QUAD, and its failure to condemn Israeli genocide Gaza, it was generally thought “non-aligned” India had become a camp follower of the US. India’s prolonged silence on Donald Trump’s reckless comments on its protectionist tendencies appeared to confirm this. Trump had dubbed India as the “King of Tariffs” with which it was impossible to trade.
And on Wednesday, he hiked the tariff on Indian goods from 25% to 50% as punishment for buying oil and weapons from Russia. Trump thundered: “I don’t care what India does with Russia. They can take their dead economies down together, for all I care.”
“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 posted online last week.
The US President’s insulting remark on the state of the economy calling it “dead” gave fresh ammunition to the Indian opposition parties which had been attacking Prime Minister Narendra Modi on various issues including the state of the economy.
The Leader of Opposition of Lok Sabha, Rahul Gandhi, took to X to say: “The Indian economy is dead. Modi killed it.” Rahul blamed the alleged Adani-Modi partnership, demonetisation, and a flawed GST for damaging businesses. But Rahul revised his stand when Trump hiked the tariff from 25% to 50%. He said that Trump was “blackmailing” India into submission, reflecting the overall dismay in India.
India Attacks US
Trump’s harsh indictment (and the opposition leader’s exploitation of it), made it imperative for New Delhi to tell the US a thing or two about the US itself. India called Trump’s attack “unjustified and unreasonable” and accused the EU and US itself of trading with Russia.
The Indian Ministry of External Affairs said in a statement that it was forced to buy “predictable and affordable” Russian oil after other supplies were diverted to Europe following the invasion of Ukraine in 2022. Buying oil from Russia was “a necessity” for India’s economy, it said. “It is revealing that the very nations criticising India are themselves indulging in trade with Russia. Unlike our case, such trade is not even a vital national compulsion,” India pointed out.
The EU imported £19.3 billion (US$ 24 billion) worth of fossil fuels in 2024. EU’s trade with Russia, at £58.6bn (US$ 78.5 billion) of goods last year, “is significantly more” than India’s total trade with Russia, which stood at £51.7bn (US$ 69.2 billion) in the financial year ending in April.
“Europe-Russia trade includes not just energy, but also fertilisers, mining products, chemicals, iron and steel and machinery and transport equipment,” the Indian government said. India also accused the US of continuing “to import from Russia uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilisers as well as chemicals”.
Last year, the US imported $87.3 billion worth of goods from India, while exporting $41.5 billion. That leaves a deficit for the US of $45.8 billion, an imbalance which Trump regards as a sign that Americans are getting a raw deal.
Data Belie Trump’s Claims
According to the Indian website First Post, India’s simple average tariff is around 16%, which is in the same league as Bangladesh (14.1%), Turkey (16.2%) and Argentina (13.4%). Trump’s tariff on India on the other hand is 25%.
India’s “weighted average tariff” is only around 4.6%. When looking at tariffs, it is the weighted average tariff that is deemed more important. This is because, simple average tariffs measure the duty on all products, even those that make up a fraction of the goods traded. However, weighted average tariffs quantify the actual levy based on the volume of trade.
India’s “weighted average” compares favourably with Vietnam (5.1 %) Indonesia (5.7%) and the European Union (5%). Of 144 nations, data shows India ranked 64 – lower than competitors such as Bangladesh, Pakistan, and Brazil.
India has also placed most of its tariffs on agriculture and automobiles – sectors that have low import volumes. And India isn’t alone in protecting agriculture. Switzerland levies 28.5%, Norway 31.1 %, and South Korea 57%.
When it comes to the US, in the 2023-24 financial year, India imported goods worth $42.2 billion from the US. Almost 75% of this was in 100 key products – most of which have low or negligible tariffs. For example, most of the high-volume US exports to India such as pharmaceuticals, energy products, machinery, and chemicals have tariffs ranging from 5 to 8%.
Most India’s imports are duty free under schemes such as Special Economic Zones (SEZs), Export-Oriented Units (EOUs), and Free Trade Agreements (FTAs). For example, India has a 0% tariff on semiconductors.
India’s average most-favoured nations (MFN) tariff on electronics is just 10%, which again compares reasonably well with Vietnam’s average MFN of 8.5%. India has also placed most of its tariffs on agriculture and automobiles – sectors that have low import volumes.
India has also made great strides in cutting tariffs over the years. In 1990, India’s average tariff stood at a whopping 80.9%. By 2023, the simple average tariff had been cut in half at 15.98%. In the last decade alone, India has reduced its weighted average tariff from 7.3% to 4.6%.
India cut its tariffs by over 80% in the period between 2001 and 2022. EU tariffs decreased by 61% and Thailand reduced its tariffs by 56 % over the same period. Many of the cuts effected by India have benefitted the US particularly after 2023 when India brought down levies on exports such as apples, walnuts, and almonds after WTO disputes were resolved. India has also reduced its tariffs or brought them to zero on high-tech goods and solar equipment.
High US Tariffs
The US, meanwhile, continues its own protectionist stance across a number of sectors including autos, textile, agriculture and dairy.
WTO data shows that the US, despite importing just 0.1% of its dairy in 2024, levied an MFN tariff of 17.2%. Its top dairy tariff clocked in at a whopping 200%. The US has imposed an average tariff of 19.28% on automobiles, 23.98% on cheese, between 114.8 and 164.8% on peanuts, an average tariff of 114.80% on tobacco and an average tariff of 197.04 % on sour cream.
Washington also has imposed a 132% on fruits and vegetables, a 164% on oilseeds, fats and oils, 35% on fish and fish products and a 38% on metals and minerals.
India Veers Towards Russia
Given the plummeting relations with the US, India’s National Security Advisor, Ajit Doval, journeyed to Moscow and met President Putin. According to TASS, discussions included Russian oil supplies, bilateral defence deals, and broader regional security issues.
India and Russia are also preparing for the upcoming summit here between Prime Minister Narendra Modi and Russian President Vladimir Putin. Doval touched on the delivery timeline of the remaining S-400 missile systems, which played a pivotal role during the India-Pakistan military standoff and Operation Sindoor in May.
IRIGC-TEC Meeting
India’s External Affairs Minister S Jaishankar is scheduled to visit Russia in the third week of August for the India-Russia Inter-Governmental Commission (IRIGC-TEC) meeting. The IRIGC-TEC is the principal mechanism for managing bilateral trade, economic, scientific, and technological cooperation. India hosted the commission’s meeting in November 2024. It is now Russia’s turn to convene the dialogue.
Given the IRIGC’s mandate to address trade and economic issues, the energy partnership with Russia and the US threat of punitive economic measures would be central to discussions during Jaishankar’s visit. The high-level engagement underscores India’s intent to protect its strategic autonomy while deepening ties with Russia, especially in energy and defence, despite pressure from the West.