India is in the middle of a high-stakes trade standoff with the United States under President Donald Trump’s administration, and the pressure is showing up in both tariffs and oil imports. As of this week, the US is charging an additional 50 percent duty on many Indian goods – 25 percent as a reciprocal tariff aimed at the trade deficit, and another 25 percent as a penalty for India buying Russian crude oil at discounted rates. These extra tariffs have already hit Indian exports hard, especially in clothing, marine products, engineering goods and leather, pushing merchandise shipments to the US down sharply.
Indian officials are now in intense negotiations to bring this initial trade deal across the line. A senior Trump administration official, Under Secretary of State Allison Hooker, is in India this week for a five-day visit focused on strengthening strategic and economic ties amid these tariff tensions. Talks are set to resume from December 10, with a US team arriving in New Delhi to push forward on an initial trade pact that could eventually serve as a launchpad for a broader Bilateral Trade Agreement.
The current 50 percent additional duties have created a major headache for Indian exporters. Reports show that overall merchandise exports to the US have fallen more than 8 percent year-on-year to around 6.3 billion dollars in recent months. The tariffs are not just a number – they’re reshaping trade flows, with importers shifting orders to other countries, and Indian micro, small and medium enterprises feeling the squeeze.
On the flip side, India’s crude oil imports from Russia are also under pressure. Because of US sanctions and the political cost of buying discounted Russian oil, India’s purchases are expected to drop to a four-year low. This is not just about energy economics – it’s about how much space India has to maneuver between US demands and its own strategic and economic interests.
Indian External Affairs Minister S Jaishankar has said that every American president brings a different style to foreign policy, and Trump’s focus on trade imbalances has defined Washington’s approach with New Delhi. While he expresses optimism that a deal is within reach, the sticking points remain: how much India will lower tariffs on US farm goods like dairy, wheat, cotton and oilseeds, and how much it will scale back on Russian oil.
For now, the tariff clock is ticking, and the outcome will matter deeply for Indian farmers, small businesses and the broader economy.
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