As trade negotiations stagnate, Trump intends to levy a 25% tariff on India along with a “penalty” from Russia

Days before his tariff deadline, US President Donald Trump is increasing pressure on India by casting doubt on the possibility of a deal with a major trading partner.

Trump harshly criticized India’s trade restrictions and specifically called out its ongoing reliance on Russian military hardware and oil purchases in social media remarks on Wednesday. He reiterated his pledge to apply 25% tariffs on all imports from India and threatened to impose yet another “penalty” in retaliation for India’s energy purchases.

Trump stated on Truth Social, “Remember, even though India is our friend, we have done relatively little business with them over the years because their tariffs are far too high, among the highest in the world, and they have the most onerous and annoying non-monetary Trade Barriers of any Country.”

Additionally, at a time when everyone wants Russia to stop the killing in Ukraine, they are Russia’s biggest energy consumer alongside China and have historically purchased the great majority of their military hardware from Russia.

The president reiterated that New Delhi’s tariffs are too high and posted again in the early hours of Thursday, stating, “I don’t care what India does with Russia,” in an apparent indication that he was growing impatient with the nation.

“I don’t care if they take down their dead economies together,” he remarked.

Trump’s tariff increase follows a series of agreements with significant US trading partners that established a broad baseline for tariffs of 15% to 20% and included obligations to increase foreign investment and market access for US goods.

Although there were few specifics, he also declared that a trading framework had been established with Pakistan, India’s neighbor and fiercest foe. According to Trump, if the deal is finalized, it will involve working with an unidentified oil corporation to explore Pakistan’s oil assets.

In a Truth Social post, he added, “Who knows, maybe they’ll be selling oil to India some day!”

The latest threat is a significant blow to India’s months-long attempt to close a deal that officials thought was almost final on multiple times.

India’s trade ministry said in a statement on Thursday that it has noted Trump’s remarks and is looking into the ramifications. It stated that New Delhi is still dedicated to achieving a bilateral trade deal that is equitable, balanced, and advantageous to both parties.

In an effort to reach a final deal, top trade officials have been traveling back and forth between Washington and New Delhi for months. However, officials claim that Trump is feeling more confident in the last days before the administration’s halted “reciprocal” tariffs are set to resume on August 1 due to recent trade agreements with Japan and the European Union.

As he has examined draft offers in recent days, Trump’s ability to obtain promises on market access for US producers has emerged as a particularly prominent concern, according to the officials. According to one official who spoke to CNN, that has significantly hampered the chances of reaching an agreement with India.

The official stated, “They’re willing to go part of the way.” However, the president wants all or nearly all impediments erased; he is not in the mood to be “part of the way.”

Trump’s approach is partly linked to a tactic that foreign trade officials participating in late-stage negotiations have come to realize more and more: Trump has no qualms about allowing those higher tariffs to be implemented, a message he has made public on numerous occasions over the past few weeks.

However, it has also produced a situation where Trump has adopted a pronounced sense of power over trading partners, including close allies, who are fighting for access to the biggest consumer market in the world.

“A 25% tariff will address and remedy the situation in a way that’s good for the American people,” Kevin Hassett, director of the National Economic Council, stated at the White House on Wednesday. “I think President Trump is frustrated with the progress we’ve made with India,” Hassett said.

According to Hassett, the tariffs on India may make them “rethink their practices.”

“I think Indian companies will eventually be moving their production to the United States, and they may even open their markets to us more so that we reevaluate our future trades,” Hassett continued.

Even if India faces a 25% tariff plus penalty, the South Asian nation is “not significantly worse off” compared to nations that did sign agreements with the US that have made broad concessions, according to Ajay Srivastava, a former Indian trade official who leads the Global Trade Research Initiative, a think tank based in Delhi.

He said that Trump’s defense of the tariffs is unconvincing. “India did not walk away from the deal; it negotiated in good faith but refused to cross its red lines,” he said.

According to Srivastava, “India’s principled stance has so far avoided the trap of a one-sided deal – and that’s a success.”

Russia’s sanctions

In reaction to Russian President Vladimir Putin’s reluctance to de-escalate his attacks on Ukraine, Trump has simultaneously intensified his threat to slap secondary sanctions on Russian energy exports.

As the countries that buy the majority of Russian energy supplies, China and India would be the most directly impacted by that dynamic, which has long been considered across administrations.

Russia remains the world’s largest supplier of oil to India, which has seen a slight increase in imports this year. About 35% of India’s total supply come from Russia, with Saudi Arabia, Iraq, and the United Arab Emirates coming in second and third, respectively.

CNN has contacted the White House to inquire about the exact amount of the penalty and whether India will receive the same formal letter from the US as other countries indicating the levy.

Trump warned reporters on Tuesday that if they don’t come to an agreement by August 1, India would be subject to 25% tariffs.

Trump said that nations who buy Russian oil will be subject to secondary sanctions earlier this month when he gave Russia a 50-day deadline to achieve a ceasefire. Since then, the ceasefire deadline has been rescheduled for August 8.

According to the officials, Trump has been quietly communicating to his colleagues that his threat to drastically increase the scope of the US sanctions regime now in place against Russia is real and not a gimmick for negotiations.

During trade negotiations in Stockholm on Tuesday, Treasury Secretary Scott Bessent claimed he personally conveyed the message to his Chinese counterparts.

At the end of the negotiations, Bessent informed reporters at a news conference, “I think anyone who buys sanctioned Russian oil should be ready for this.”

India remained the second-largest purchaser of Russian fossil fuels behind China, according to a June analysis of Russian fossil fuel exports and sanctions by the Centre for Research on Energy and Clean Air.