The US has added a tariff of 25 per cent on Indian goods as a sanction to trade of oil with Russia by India. This order also subjects outstanding duties to a new tariff 21 days later in the event of non-exemption.
Why the Tariff Was Imposed?
According to the US government, India is the country that is directly or indirectly importing Russian oil today. The US, in its turn, has chosen to target the imports by introducing an increased ad valorem tariff of 25 per cent on imports from India.
When Will It Be Effective?
There will be a 25% tariff on Indian commodities:
- Entered under Consumption or withdrawn from warehouses in the US within 21 days upon the date of the order.
- Exceptions occur for goods already in transit before the deadline or planned to be consumed before September 17, 2025.
This gives a clear indication that the order gives a 21-day grace period, and the import tariff increase in India will come into effect after this duration.
What About Other Duties?
In section 3 of the order, this new 25 per cent tariff is specified as being imposed together with any duties, taxes, or other charges which may now or hereafter be imposed on the Indian goods. This will not be applicable, however, in a case where the goods are covered by section 232 of the Trade Expansion Act of 1962.
Is the American President Getting Desperate?
India is clearly not complying with Washington’s pressure, continuing to buy oil from Russia, considering arms purchases from Moscow, and potentially reducing future military deals with the US. Adding to the discomfort, Prime Minister Modi’s recent visit to China has heightened concerns in Washington over a strengthening Russia-China-India nexus.
While the US disapproves of India’s current geopolitical stance, it cannot afford to ignore India’s massive consumer and defense markets. This puts the American leadership in a classic Catch-22: impose sanctions and risk losing influence, or stay engaged and appear weak in its foreign policy approach.
