Trump slaps 50% tariff on India for buying Russian oil & weapons

U.S. President Donald Trump has imposed 50 per cent tariff on goods from India, weeks after he announced that the U.S. will be imposing an additional 25 per cent penalty on India for purchasing Russian oil and military equipment.

The new tariff became effective at 12:01am in Washington on Wednesday, Aug. 27.

Among the highest tariffs in the world

India, the world's fifth-largest economy, is among the countries with the highest tariff rates on its goods in the world.

BBC observed that this could deal a blow to India as the U.S. was, until recently, India's largest trading partner.

Indian goods exports to the U.S. were worth US$87.3 billion (S$112.5 billion) last year, reported The Guardian, citing the U.S. trade representative.

Among the top goods the U.S. received from India last year were pharmaceuticals, smartphones, and apparel, CNN reported.

Enabling Moscow's war in Ukraine: Trump

Trump previously said that the additional "penalty" was because India purchased military equipment from Russia and is Russia's largest buyer of oil, which enables Moscow's war in Ukraine.

Trump and Russian President Vladimir Putin recently met in Alaska, where they discussed the possibility of ending, or even pausing, the war in Ukraine.

However, the meeting yielded no agreement.

Some economists cited by The Guardian said that the additional penalty predicted a "precipitous fall in trade" between the U.S. and India.

Buy local: Modi

Amidst the tariff penalty, Indian Prime Minister Narendra Modi promised to reduce taxes to reduce economic burdens, BBC reported.

He also urged the country to buy local and to be "self-reliant", seemingly not backing down, at least publicly, in the face of Trump's move.

Modi previously stated that India could not accede to Trump's trade demands as he needed to protect farmers.

Economists also noted that India was able to boost its economy with cheap fuel from Russia.

“All of us should follow the mantra of buying only ‘Made in India’ goods,” Modi said on Tuesday (Aug. 26), as quoted by The Guardian.

The prime minister also encouraged local businesses to display signs that said "Made in India" outside their stores.

“Pressure on us may increase [from the tariffs], but we will bear it,” Modi added.

Top image via Sajjad Hussain, Andrew Caballero-Reynolds, Mikhail Metzel/AFP/POOL/AFP