US Imposes 25% Tariff on Indian Goods; Limited Transit Exemptions Announced

The United States has formally notified the imposition of an additional 25% tariff on Indian imports, effective from 12:01 am EST on August 27, 2025, in line with President Donald Trump’s Executive Order 14329 issued earlier this month.

However, limited relief has been extended for shipments already in transit before the deadline. According to the notification issued by the US Department of Homeland Security, consignments that had been loaded at the port of origin and were en route to the US prior to the deadline will be exempt, provided they are entered for consumption or withdrawn from bonded warehouses no later than September 17, 2025. Importers will be required to certify eligibility for this “in-transit exception” through a revised Harmonised Tariff Schedule (HTSUS) declaration.

The official notice stated:
“To effectuate the President’s Executive Order 14329 of 6 August 2025, which imposed a specified rate of duty on imports of articles that are products of India, the Secretary of Homeland Security has determined that appropriate action is needed to modify the Harmonised Tariff Schedule of the United States, as set out in the Annex to this notice.”

Exempt Categories

While most Indian goods will now face tariffs of up to 50%, a select group of products has been excluded from the hike. Exemptions cover:

• Iron, steel, aluminium, and copper products
  
  
• Passenger vehicles, light trucks, and auto components
  
  
• Pharmaceuticals
  
  
• Electronics, including semiconductors, mobile phones, and tablets

Strategic Impact on India

India is expected to be among the countries most adversely affected by the latest round of Washington’s trade offensive, with tariff escalation directly linked to New Delhi’s continued energy engagement with Moscow. President Trump has repeatedly argued that India’s purchase of Russian crude oil is “fuelling the war machine” in Ukraine.

In response, Indian refiners — notably Indian Oil Corporation and Reliance Industries — are preparing to scale down, though not suspend, Russian oil imports. This signals that New Delhi is unwilling to sever its energy partnership with Moscow despite growing US pressure.

The move is likely to test India’s balancing act between maintaining strategic autonomy and navigating heightened trade tensions with Washington, while also reinforcing its longstanding ties with Russia.