Strategic Lens
Why did the US raise tariffs on India in 2025, and what changed by 2026?
What happened. On 30 July 2025 the US announced 25 percent tariffs on Indian goods plus a 25 percent penalty linked to India's Russian arms and energy purchases, taking the total to about 50 percent. In February 2026 the two announced a trade agreement.
- In July 2025 President Trump criticised India for its oil trade with Russia, and a US Senate bill proposed tariffs of up to 500 percent on such buyers.
- The tariff announcement came as the two governments disagreed over who had brought about the India-Pakistan ceasefire, and Indian media saw a link.
- In February 2026 the two announced a trade agreement. President Trump said India would stop buying Russian oil and buy more from the US, with tariff reductions on Indian goods.
- Indian officials said energy security and diversification stayed priorities and that refiners needed time to finish earlier Russian cargoes.
- India's goods exports to the US still rose in 2025, to about USD 92.6 billion from about USD 79.4 billion in 2024, though this calendar-year figure cannot show what the tariffs did.
Understanding. From our lens, the US linked trade to energy and security in one bargain, and India answered by shifting some purchases while defending its right to choose suppliers. The two positions differ on how much of the oil change was agreed.
Benefits
- IndiaA deal lowers tariffs on India's largest export market and gives Indian refiners more sources.
Constraints
- BothEach side describes the oil commitment differently, which leaves room for later disputes.
Sources: Wikipedia: India–United States relations (revision of 16 September 2026); Wikipedia: India–Russia relations (revision of 24 September 2026); UN Comtrade (public preview API), annual goods trade, HS classification (retrieved 26 September 2026)
Last updated on 25 September 2026