Trump imposes 25% tariff on Indian imports, strikes oil deal with Pakistan

US President Donald Trump has imposed a 25% tariff on imports from India along with an unspecified “penalty,” citing New Delhi’s continued purchases of Russian arms and energy. At the same time, his administration has finalised a deal with Pakistan to jointly develop its oil resources.

On Wednesday, Trump announced that Indian imports would be subject to a 25% tariff, effective August 1, with further penalties due to India’s trade ties with Russia. Posting on his Truth Social platform, he also revealed plans for other tariff increases, some reaching as high as 50%.

Despite calling India a “friend,” Trump noted that trade talks with New Delhi were ongoing, suggesting more clarity would emerge by the week’s end. “India has some of the world’s highest tariffs, but they’re now willing to reduce them significantly,” he said. “We’ll see how the negotiations progress.”

In his post, Trump criticised India’s high trade barriers and its long-standing reliance on Russian military hardware and energy, stating that this continued partnership undermines global efforts to stop the war in Ukraine. “India maintains the highest tariffs and the most burdensome non-tariff trade barriers globally,” he wrote. “They remain Russia’s biggest energy customer, along with China – not a good look.”

The proposed 25% tariff would disproportionately impact India compared to other US trading partners and risks derailing months of negotiations, potentially weakening a key US ally in countering China’s regional influence. The White House has previously flagged India’s average agricultural tariff of around 39%, with duties as high as 50% on products like corn, apples, and vegetable oils.

India responded by stating it is reviewing the potential impacts of Trump’s actions but remains committed to a fair and balanced trade agreement. “Talks with the US have been ongoing in recent months to reach a mutually beneficial deal, and we remain focused on that goal,” said a government statement.

Russia remained India’s top crude oil supplier in the first half of 2025, accounting for 35% of imports. The US, which holds a $45.7 billion trade deficit with India, continues to pressure New Delhi to reduce its reliance on Russian energy.

Shortly after the announcement of tariffs on India, Trump revealed a new agreement with Pakistan to help develop its substantial oil reserves. “We’ve just finalised a deal with Pakistan to jointly develop its massive oil potential,” he wrote, adding that a US oil firm would soon be selected to lead the project.

US-Pakistan goods trade totalled approximately $7.3 billion in 2024, up from \$6.9 billion the previous year. The US trade deficit with Pakistan reached $3 billion in 2024, a 5.2% increase from 2023.

Although Trump didn’t provide full details of the Pakistan deal, he took a jab at India by speculating, “Maybe they’ll end up buying oil from Pakistan someday!” His administration has sought to strengthen ties with Asian countries to counter China’s growing regional dominance. Pakistan is officially classified by the US as a “major non-NATO ally.”

Trump’s broader strategy includes using tariffs to pressure trade partners and encourage foreign companies to relocate to the US. He has already announced preliminary trade agreements with several countries, including the UK, Vietnam, Japan, Indonesia, the Philippines, and the European Union.