Trump's 25% tariff plus penalty on India harsh but not a setback: GTRI chief

While Trump’s announcement of a 25% tariff plus penalty on Indian goods seems harsh, a closer look shows that India is not significantly worse off than countries that did sign deals with the U.S., says Global Trade Research Initiative's founder, Ajay Srivastava.

Despite the US pressure and call for high tariffs on India, Srivastava says a potential trade deal is still possible. "India is not alone; over 90 countries face similar U.S. pressure. A deal may still emerge, but only on fair terms. For now, India’s principled stand has avoided the trap of a one-sided deal—and that’s a success."

Earlier, Donald Trump said India would pay a tariff of 25% and a "penalty" for indulging in business with Russia. Trump's statement comes as the two countries failed to reach an agreement on bilateral trade, despite five rounds of talks, though talks are still on.

Srivastava said even the UK, EU, Japan, Indonesia, and Vietnam now face elevated tariffs, and that these countries, in return, have given sweeping concessions—zero tariffs on U.S. farm goods, massive investment pledges, and purchases of U.S. oil, gas, and arms.

However, India has made no such concessions. "India did not walk away from the deal; it negotiated in good faith but refused to cross its red lines—particularly on agriculture, where over 700 million livelihoods are at stake," said Srivastava.

He asserted that Trump’s justification for the tariffs—India’s tariffs, trade barriers, and ties with Russia—doesn’t stand up to scrutiny. India’s tariffs are WTO-compliant, and non-tariff barriers are common globally. On Trump's charge of India's growing imports from Russia, the GTRI chief says discounted Russian oil has helped India manage inflation during global volatility.

Amid US President Donald Trump’s announcement to levy a 25% tariff as well as secondary sanctions on exports from India starting from August 1, 2025, India's business associations have expressed disappointment, saying it will have a clear bearing on India's exports, but experts say if the industry steps up with quality, compliance, and competitiveness, it's a clear opportunity for it to reduce exposure to risks and emerge as a cost-effective alternative in manufacturing.