Tariff Network: how India's trade will change after the introduction of new US duties

Trade between Washington and New Delhi risks falling by about 35-40% - exports of textiles, jewelry and machinery from the republic will suffer the most, analysts polled by Izvestia believe. On August 27, new duties on India for the purchase of oil from Russia came into force — now they reach 50%. However, negotiations on this topic between the countries are still ongoing. New Delhi has decided not to completely abandon Russian raw materials, but to act based on its national interests. What are the risks for Moscow and whether the parties will be able to agree on the abolition of duties — in the Izvestia article.

Why would Trump impose tariffs on India

Initially, Donald Trump imposed tariffs of 25% against India, but on August 4, he announced that he intended to "significantly increase duties" for New Delhi due to deals on the purchase of Russian oil. The American leader accused the country of importing large volumes of our raw materials and then selling them on the open market.

In three weeks, the countries held five rounds of negotiations on fees, but they were unsuccessful. On August 27, at 7:00 Moscow time (midnight Washington time), the 50% tariffs came into force.

— Probably, such measures on the part of the United States are aimed at strengthening their foreign economic positions in the Indian market. The United States is the main export destination for Indian goods, which is almost 20% dependent on the American market. At the same time, it is important for New Delhi to pursue a policy of increasing exports, given the chronic problem of a trade deficit," said Arina Surkova, an expert at the RUDN University Faculty of Economics.

At the same time, after a meeting with Russian President Vladimir Putin, Donald Trump noted that America would not impose duties on China over oil for the time being. Washington is significantly less dependent on trade with New Delhi than with Beijing, says Olga Belenkaya, head of the Macroeconomic analysis department at Finam. For comparison, the trade turnover between the United States and China last year amounted to almost $690 billion, and with India — about $130 billion.

In addition, the American authorities drew attention to the fact that China had previously bought oil from Russia, and India had recently increased its purchases and subsequent resale precisely because of the discount, recalled Vladimir Chernov, analyst at Freedom Finance Global.

At the same time, the large-scale tariffs that the United States imposed on a number of countries in April had negative consequences for the US economy. Then it sank by almost 20%. This led to the conclusion of a trade truce, Olga Belenkaya recalled.

India-US Trade in 2025

In general, the duties will affect over 55% of the goods that New Delhi sells to Washington. Key export products — electronics and pharmaceuticals — are exempt from fees. This still allows Apple to maintain large-scale investments in new factories in India, Olga Belenkaya noted.

She added that Indian exports to the United States of textiles, jewelry, clothing and footwear, and automobiles could be the most affected. Accordingly, India will try to redirect some of the supplies that previously went to the United States to other markets. For example, they can be China, the countries of the Middle East and Latin America.

The new tariffs have entered into force, but negotiations between India and the United States are continuing. However, the measures taken will affect mutual trade in one way or another. It may decrease by 35-40%, experts admit. In particular, about $48 billion of Indian exports to the United States (out of $130 billion) are under attack, Olga Belenkaya emphasized.

Risks for Russia from duties against India

The trade turnover between Russia and India in 2024 amounted to a record $70.6 billion. At the same time, Moscow imported only $4.8 billion worth of goods, while exporting $67.2 billion. The lion's share of purchases from our country is made up of mineral resources — about $60 billion.

The key risks for the Russian Federation are a reduction in exports to India and oil and gas budget revenues, says Olga Belenkaya from Finam. According to the updated plan of the Russian Ministry of Finance, the treasury deficit is expected to reach 3.8 trillion rubles this year. However, in the first seven months of this year, it has already amounted to 4.9 trillion.

At the same time, global geopolitical tensions persist, leading to volatility in commodity prices. Although Brent quotes have regained some of their losses (as of August 27, the price for this brand was $66.89 per barrel), energy resources have fallen in price by a quarter since the beginning of the year.

According to Indian Ambassador to Russia Vinay Kumar, New Delhi is not considering an embargo on Russian oil, Izvestia reported earlier. The country will continue to buy raw materials based on financial benefits.

However, it is possible that India will want to slightly reduce imports from Russia in order to solve the problem with duties. So, the plants can reduce purchases from 1.8 million barrels per day to 1.4-1.6 million barrels, the media noted. At the same time, India's complete abandonment of Russian oil is unlikely, Olga Belenkaya believes. Therefore, the republic will most likely not be able to avoid the secondary duty.

At the same time, India may be looking for opportunities to conclude more profitable long—term deals with suppliers other than Russia, which can reduce purchases from our country, said Vladimir Chernov of Freedom Finance Global. Disruptions in oil supplies are possible while companies adapt to the new conditions, according to Kirill Kononov, an analyst at BCS World Investments.

Anastasia Prikladova, Associate Professor of the Department of International Business at Plekhanov Russian University of Economics, admits that the risks of reducing Russian exports to India remain. Although, in part, the decrease in the physical volume of supplies can be offset by rising prices, including by reducing discounts on Russian oil.

According to Vladimir Chernov, the probability of success in negotiations and the abolition of additional duties is also still very high, as India's trade and strategic importance to the United States remains high. However, the situation is still tense.