Trump’s tariff threat causes Indian rupee to slip.
WASHINGTON: According to US President Donald Trump, the tariff on goods coming from India will go up “very substantially” over the next 24 hours. This is because India is still buying oil from Russia.
He also said that India’s offer of a “zero tariff” on US goods was not good enough because India was “fuelling the war” in Ukraine.
On July 31, Trump threatened India with a 25% tariff on Indian goods and an unspecified penalty for buying Russian oil.
Trump said in an interview with CNBC on Tuesday, “They’re fueling the war machine, and if they’re going to do that, then I’m not going to be happy.”
India strikes back, and the markets fall.
In the meantime, both the ruling party and the main opposition party in India spoke out against the US president’s threat as a sign of political unity.
Manish Tewari, a member of parliament and head of the opposition Congress, said that Trump’s “disparaging remarks hurt the dignity and self-respect of Indians.”
He went on to say, “It’s time to stop this constant bullying and hectoring.”
In a post on X, BJP Vice President Baijayant Jay Panda quoted Henry Kissinger, the most powerful US diplomat during the Cold War: “To be an enemy of America can be dangerous, but to be a friend is deadly.”
India’s Foreign Ministry argued that the country was being unfairly singled out for scrutiny concerning its acquisition of Russian oil, pointing out the ongoing trade relations with Russia maintained by both the US and the European Union amid the Ukraine conflict.
“It is revealing that the very nations criticising India are themselves indulging in trade with Russia,” the ministry remarked in a statement released on Monday.
India has protested that the US and EU are applying double standards, claiming that India is being singled out for purchases of oil from Russia, which those two entities extensively trade with even in the face of the ongoing war.
Nonetheless, the Indian rupee, which was predicted to plunge to unprecedented levels alongside the dollar, appears to have been saved by what is believed to have been an intervention by the Reserve Bank of India.
The rupee’s exchange rate was 87.8000 to the US dollar, a depreciation of 0.2pc compared to Monday’s 87.6550 close. The currency dipped to an intra-day low of 87.8850, close to the all-time low 87.95 recorded in February. A trader at a government-owned bank remarked that the Reserve Bank of India helped offset some of the tariff-related pressure on the rupee through direct market interventions.
Published in Daily Pak, August 6th, 2025
