Leaders of India and Philippines ink defence, trade deals as nations mark 75 years of diplomacy
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CNA
an hour ago
- CNA
Trump orders extra 25% tariff on Indian goods, straining trade ties further
WASHINGTON: US President Donald Trump on Wednesday (Aug 6) ordered an additional 25 per cent tariff on goods from India for its purchases of Russian oil, in a move that threatens to severely disrupt bilateral trade and marks the sharpest downturn in ties since his return to office. The tariff, set to take effect in three weeks, comes on top of a separate 25 per cent duty entering into force on Thursday, according to the text of the executive order released by the White House. The order also threatens potential penalties on other countries deemed to be "directly or indirectly importing Russian Federation oil". Exemptions remain for items targeted by separate sector-specific duties such as steel and aluminium, and categories that could be hit, like pharmaceuticals. The White House said the move was "necessary and appropriate". INDIA HITS BACK India's foreign ministry said the decision was "extremely unfortunate" and that New Delhi will take all actions necessary to protect its national interests. "Our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India," it said in a statement. "It is therefore extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest." Trump has been ramping up pressure on India after signalling fresh sanctions on Moscow if it did not make progress by Friday towards a peace deal with Kyiv, as Russia's invasion of its neighbour drags on. India's national security adviser was in Moscow on Wednesday, media in New Delhi reported, coinciding with a visit by US envoy Steve Witkoff. India's foreign ministry earlier said US pressure to stop it from buying Russian oil was "unjustified and unreasonable" and that it would protect its interests. ECONOMIC FALLOUT FOR INDIA Analysts say the new tariffs, which could push Indian export duties to as high as 50 per cent, will impact sectors such as textiles, footwear, gems and jewellery. India exported nearly US$87 billion worth of goods to the US in 2024. 'This is a severe setback. Nearly 55 per cent of our shipments to the US will be affected,' said S.C. Ralhan, president of the Federation of Indian Export Organisations. Indian exporters now face a 30 to 35 per cent disadvantage compared with competitors in Vietnam, Bangladesh and Japan, economists warn. The move follows five rounds of stalled trade talks, derailed by disagreements over US access to Indian agriculture and dairy markets, and New Delhi's refusal to cut Russian oil imports, which hit a record US$52 billion last year. The timing of the tariffs, effective 21 days after Aug 7, suggests Washington may still be open to negotiation, according to Indian officials. 'We still have a window,' a senior official said, adding that phased cuts in Russian oil imports could be part of a compromise. NO RETALIATION PLANNED India has not announced any retaliatory tariffs or plans for a high-level visit to Washington. Instead, the government is considering domestic relief for exporters, including loan guarantees and interest subsidies. A sharp drop in shipments to the US could drag India's GDP growth below 6 per cent this year, down from the central bank's 6.5 per cent forecast, said Sakshi Gupta of HDFC Bank. Markets responded with caution, the Indian rupee weakened in offshore forwards trade, and equity futures fell modestly. 'Unless there's swift clarity or a breakthrough, a near-term knee-jerk market reaction is inevitable,' said Mayuresh Joshi, head of equity research at Willian O' Neil. CHINA EXEMPT, FOR NOW Trump's move could reshape India's economic ambitions. Many American companies have seen India as an alternative to Chinese manufacturing, which Trump had hoped to diminish through the use of tariffs. Even though China also buys oil from Russia, Beijing was not subject to the additional tariffs in the order signed by the Republican president. The US and China are currently in negotiations on trade, with Washington imposing a 30 per cent tariff on Chinese goods and facing a 10 per cent retaliatory tax from Beijing on American products. Meanwhile, Indian Prime Minister Narendra Modi is preparing for his first visit to China in over seven years, raising speculation about a potential shift in New Delhi's strategic alignments.
Business Times
4 hours ago
- Business Times
Trump imposes additional 25% tariff on Indian goods, relations hit new low
[WASHINGTON] US President Donald Trump on Wednesday (Aug 6) issued an executive order imposing an additional 25 per cent tariff on Indian goods citing New Delhi's continued imports of Russian oil, sharply escalating tensions between the two countries after trade talks collapsed. The new measure raises tariffs on some Indian goods to as high as 50 per cent – among the steepest faced by any US trading partner. The move is expected to hit key Indian export sectors including textiles, footwear, and gems and jewellery and marks the most serious downturn in US-India relations since Trump returned to office in January. It also comes as Indian Prime Minister Narendra Modi prepares for his first visit to China in over seven years, suggesting a potential realignment in alliances as ties with Washington fray. 'India will take all actions necessary to protect its national interests,' India's external affairs ministry said in a statement, saying it was 'extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest.' It said India's imports were based on market factors and aimed at energy security for its population of 1.4 billion. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Trade analysts warned the tariffs could severely disrupt Indian exports. The additional 25 per cent tariff comes into effect 21 days after Aug 7, the order said. 'With such obnoxious tariff rates, trade between the two nations would be practically dead,' said Madhavi Arora, economist at Emkay Global. Indian officials have privately acknowledged growing pressure to return to the negotiating table. A potential compromise could involve a phased reduction in Russian oil imports and diversification of energy sources. A senior Indian official said New Delhi was blindsided by the sudden imposition of the new levy and the steep rate, as both countries continue to discuss trade issues. Trump's decision follows five rounds of inconclusive trade negotiations, which stalled over US demands for greater access to Indian agriculture and dairy markets. India's refusal to curb Russian oil purchases – which surged to a record US$52 billion last year – ultimately triggered the tariff escalation. 'Exports to the US become unviable at this rate. Clearly, risks to growth and exports are rising, and the rupee may face renewed pressure,' said Garima Kapoor, economist at Elara Securities. 'Calls for fiscal support are likely to intensify.' Trump's executive order does not mention China, which also buys Russian oil. A White House official had no immediate comment on whether an additional order covering those purchases would be forthcoming. US Treasury Secretary Scott Bessent last week said he warned Chinese officials that continued purchases of sanctioned Russian oil would lead to big tariffs due to legislation in Congress, but was told that Beijing would protect its energy sovereignty. The US and China have been engaged in discussions about trade and tariffs, with an eye to extending a 90-day tariff truce that is due to expire on Aug 12, when their bilateral tariffs shoot back up to triple-digit figures. REUTERS
CNA
4 hours ago
- CNA
Trump raises tariffs on goods from India to 50% over Russian oil purchases
WASHINGTON: US President Donald Trump issued an executive order on Wednesday (Aug 6) imposing an additional 25 per cent tariff on goods from India, bringing the total to 50 per cent. "I find that the government of India is currently directly or indirectly importing Russian Federation oil," he said in an executive order. The White House said the move was "necessary and appropriate" and the new tariff rate would take effect 21 days from Aug 6. This comes after Trump said on Tuesday he would increase the tariff on imports from India "very substantially" over the next 24 hours and alleged that New Delhi's purchases of Russian oil were "fuelling the war" in Ukraine.
