Will a 500% tariff be imposed on India? What we know is as follows

India’s ongoing trade negotiations with the United States have reached a critical juncture, as the August 1 deadline for a fresh wave of tariffs imposed by President Donald Trump looms. While India remains one of the few countries still negotiating with Washington, progress has been slow, and the consequences of failure could be economically severe.

Key Sticking Points in the Talks

1. Tariffs on Auto Components, Steel, and Farm Products
   These remain the core issues. The U.S. seeks greater access for its exports, while India is pushing for relief from steep duties that threaten its industrial and agricultural sectors.

2. Agricultural Market Access & GM Crops
   The U.S. wants India to cut tariffs on apples, almonds, and genetically modified (GM) produce, but India is resisting—citing protection for small farmers and public opposition to GM foods.

3. India’s Generous Offer

   • Proposal to reduce tariff gaps from 13% to under 4%.

   • Zero tariffs on 60% of U.S. imports.

   • Preferential access for 90% of U.S. goods.
     In exchange, India wants reduced tariffs on textiles, shrimp, grapes, and bananas, key sectors for its rural and labour-intensive economy.

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The 500% Tariff Threat: The Sanctioning Russia Act

A bipartisan bill — the Sanctioning Russia Act of 2025 — adds more pressure:

• Seeks to penalise countries continuing Russian energy imports.

• Includes tariffs as high as 500%, aimed at India and China.

• While not yet enacted, Trump’s comment — “I’m looking at it very strongly” — signals that it could be used as a diplomatic lever.

India has argued that:

• Its Russian oil imports are essential for energy security.

• The U.S. itself continues to import Russian uranium, exposing a double standard.

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Global Context: Other Countries Already Hit

• 14 nations have already received formal U.S. letters announcing new tariffs.

• Tariffs range:

  • 20% for Vietnam and the Philippines

  • Up to 40% for Laos and Myanmar

• India has not yet received such a letter, meaning talks are still active, but time is short.

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What’s at Stake for India

According to economist Sankhanath Bandyopadhyay:

• Exports worth $7–10 billion could be impacted, especially:

  • Gems and jewellery

  • Marine products

  • Pharmaceuticals

  • Electronics

  • Steel

• These sectors are heavily reliant on the U.S. market and would suffer under high tariffs.

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Hope for a Breakthrough: Interim Deal Possible

There is a glimmer of hope, as Bloomberg reports that an interim trade deal may be within reach:

• Would cap tariffs below 20%, offering India breathing room.

• Could position India as one of the few nations receiving U.S. concessions.

A delegation from India is expected in Washington soon, potentially the final chance to avert the tariffs before August 1.

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Conclusion

The outcome of this trade negotiation will have broad implications not only for India–U.S. economic ties, but also for India’s global export competitiveness, its energy strategy, and its foreign policy balancing act between the West and Russia.

If successful, India could emerge as a rare exception amid Trump’s global tariff wave.

If not, it risks becoming the latest casualty of an increasingly protectionist U.S. trade agenda.