Listeners, welcome back to “India Tariff News and Tracker,” your quick briefing on how U.S. trade policy under Donald Trump is reshaping India–U.S. economic ties.
According to American Kahani, the Trump administration has rolled out sweeping tariffs on Indian exports in 2025 under the banner of “reciprocal” trade. Early in the year, Washington moved to a 26 percent reciprocal tariff on many Indian goods, later formalized at about 25 percent. By August, the U.S. added an additional 25 percent penalty tariff tied directly to India’s continued imports of discounted Russian oil, taking effective duties on a range of Indian products to roughly 50 percent. American Kahani notes that, before this escalation, Indian rice entering the U.S. faced only about a 10 percent tariff; that same rice now faces a 50 percent border tax, yet shipment volumes have stayed surprisingly resilient, underscoring how central Indian basmati and other varieties are to U.S. consumers.
Indian News Network and other trade-focused outlets echo that India’s rice exporters remain competitive despite the higher U.S. tariffs, thanks to strong brand recognition and limited alternative suppliers at similar quality and price. Business Standard reports that Trump’s hard line comes at a moment when U.S. farmers themselves are under pressure from high input costs, and some in the farm lobby worry that retaliatory moves by India could limit their own access to a fast‑growing market.
On Capitol Hill, pushback is building. The Times of India reports that Indian‑origin U.S. lawmakers have warned that the combination of 50 percent tariffs on Indian goods and a steep proposed $100,000 H‑1B visa fee is hurting American businesses and straining what has long been marketed as a “strategic partnership.” At a House Foreign Affairs subcommittee hearing on South Asia, they argued that Trump’s tariff strategy risks undercutting supply chains that depend on Indian pharmaceuticals, IT services, textiles, and specialty foods, while also sending a negative signal to skilled Indian professionals considering the U.S. as a destination.
Trade experts speaking to CNBC‑TV18 say they expect the 25 percent “penal” tariff linked to Russian oil to become a central bargaining chip in any new India–U.S. trade talks. One international trade specialist suggested that if India recalibrates its oil sourcing and trims some of its own retaliatory tariffs—potentially down to the mid‑teens—Washington could phase out the extra 25 percent penalty, bringing combined duties closer to the base 25 percent “reciprocal” level.
For India, the stakes are high: exporters of rice, steel products, textiles, and certain engineering goods face a tougher U.S. market, while New Delhi must decide how far to go in counter‑tariffs without derailing broader strategic and technology cooperation with Washington.
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