The United States has doubled tariffs on Indian goods to 50%, escalating trade tensions and drawing sharp criticism from New Delhi. The move, announced by President Donald Trump, directly links India’s continued purchase of Russian oil to what the White House framed as a national security issue.

The latest duties, effective 12:01 a.m. ET on August 27, come on top of a 25% reciprocal tariff imposed earlier this month. The new “penalty tariff” adds another 25%, bringing total duties on many Indian exports to 50%. Certain goods arriving before September 17 will avoid the additional charge.

The tariff hits a broad range of Indian exports including textiles, jewelry, seafood, auto parts, leather, and furniture. Exemptions remain for pharmaceuticals, semiconductors, and electronics, sectors considered strategically important for U.S. supply chains.

Trump defended the move as necessary to pressure India over its energy policy, claiming that purchases of Russian oil undermine global sanctions efforts tied to the Ukraine war. Trade negotiations aimed at deepening ties had already stalled over agriculture, tariff disputes, and energy policy differences.

India condemned the decision as “unfair and unjustified.” Prime Minister Narendra Modi’s government quickly rolled out countermeasures, including $12 billion in income tax cuts and streamlined GST reforms designed to soften the impact on businesses and consumers. Officials also signaled potential shifts in diplomacy, easing trade routes with China and preparing high-level visits to Beijing.

Analysts warn the tariffs could trim 0.3 to 0.8 percentage points off India’s GDP growth this year, with sectors like apparel and jewelry facing immediate strain. Moody’s cautioned that India’s “Make in India” manufacturing drive could suffer from reduced competitiveness abroad.

The tariff escalation threatens to sour one of Washington’s most critical partnerships in Asia. Observers say the move could weaken cooperation in defense, technology, and the Quad security alliance, while driving India to seek deeper trade links with China.

Despite the standoff, Trump suggested tariffs could be rolled back if India agrees to a new trade deal favorable to the U.S. For now, however, the world’s two largest democracies remain locked in a dispute with economic and geopolitical stakes far beyond the trade balance sheet.

Sources: Reuters, India Times, Financial Times, The Times (UK), Economic Times and Wall Street Journal