India set to discuss foreign policy with Tharoor-led committee amid escalating US tariff increase
India has announced that it will impose 25% retaliatory tariffs on US-origin goods starting from July and August 2025, in response to the US's 50% tariffs on steel and aluminum imports from India. This move comes as part of a broader escalation in global trade tensions and reciprocal protectionism.
The retaliatory tariffs, which will be effective from July 31, 2025, and August 27, 2025, apply broadly but include exceptions and phased implementation, as outlined in India’s trade regulations. The purpose of these tariffs is to counteract the US's increased tariffs on Indian steel and aluminum exports.
The announcement was made by Congress MP Shashi Tharoor, who also expressed concern about the recent tariff hike by the US. Tharoor stated that India must safeguard its interests in response to the US's behavior change.
The diplomatic implications of this move signal heightened trade tensions between India and the US. The retaliatory tariffs not only affect all US products but also add layers of complexity due to exceptions and savings clauses preventing tariffs on certain shipments depending on timing and origin.
Economically, the tariff cycle raises consumer prices and income losses, indicating broader adverse effects for both countries. According to economic analysis by the Budget Lab at Yale, these tariffs contribute to higher consumer prices in the US, with an overall effective tariff rate increasing to 18.6%, the highest since the 1930s, and household income losses of over $2,100 annually on average, with disproportionate impacts on low-income households and higher prices particularly in clothing and textiles.
In addition to the retaliatory tariffs, the US President Donald Trump signed an executive order imposing an additional 25% levy on India for New Delhi's purchases of Russian oil, which will come into effect on August 27. The Ministry of Commerce & Industry will also be present at the briefing to explain the developments in India's foreign policy in connection to US-India trade negotiations and tariffs.
Tharoor did not mention any specific retaliatory tariffs India is considering on US goods, but he implied that India may need to reconsider its strategy due to the US's changed behavior. The External Affairs Ministry will brief a standing committee on India's foreign policy developments on Monday, and Tharoor suggested that talks might be held in the coming two to three weeks to find a solution. The committee is headed by Congress MP Shashi Tharoor, who also stated that the MEA informed the parliamentary panel about the geopolitical contest resulting from the US's secondary sanctions.
This brings the total duties on Indian purchases of Russian oil to 50%, as the US's additional levy is added to the existing 25% duty. Among all countries in the world, the US has imposed one of the highest duties (50%) on India. Tharoor's statement indicates that India is still committed to engaging with the US constructively despite the geopolitical contest.
- The retaliatory tariffs on US-origin goods, announced by Congress MP Shashi Tharoor, are part of a broader response to the US's increased tariffs on Indian steel and aluminum exports, and they are also a reflection of India's efforts to safeguard its business interests in the face of US policy-and-legislation changes.
- The escalating war-and-conflicts in global trade relations, as seen in the retaliatory tariffs between India and the US, are causing economic consequences such as increased consumer prices and income losses, with disproportionate impacts on low-income households.
- Apart from the retaliatory tariffs, the US has imposed an additional 25% levy on India for its purchases of Russian oil, signaling a further tightening of economic ties between the two countries and adding to the complexity of Indo-US relations in the field of politics and general-news.
