100% U.S. tariff threat: Can India’s new trade deals reduce its dependence on America?
As the Trump administration has repeatedly changed tariffs on Indian goods, New Delhi has been signing trade agreements at a rapid pace. But can these new markets meaningfully reduce India’s dependence on the U.S. as it’s faced with 100% tariffs?
By Areena Arora and Gandla Sneha
Published September 21, 2026
As the Trump administration has repeatedly changed tariffs on Indian goods, New Delhi has been signing trade agreements at a rapid pace. But can these new markets meaningfully reduce India’s dependence on the U.S. as it’s faced with 100% tariffs?
How U.S. tariffs on Indian goods have changed since 2025
The U.S. House of Representatives has passed legislation giving U.S. President Donald Trump broad powers to impose sanctions on Russia and tariffs of up to 100% on countries that buy Russian oil and gas, a measure that could once again put Indian exports in the firing line.
The development comes after more than a year of upheaval in India-U.S. trade. Since Trump returned to the White House, Indian exporters have faced repeated changes in tariff rates, the products covered and the laws used to impose them. The uncertainty matters because the U.S. has only become more important to India’s exporters. This bill comes amidst New Delhi and Washington negotiating a preliminary trade deal.
The Trump administration had announced an additional 25% tariff, on top of an existing 25% tariff on India in July 2025, for the purchase of Russian oil. The share of Russian crude oil in Indian oil imports fell to its lowest level in two years in December 2025, but energy markets have been under additional pressure owing to the U.S.-Iran conflict and New Delhi’s import of Russian oil hit an 11-month high in April this year. However, the U.S. Treasury paused sanctions for oil shipments that were in transit before March 11, as supplies were hit following the start of the conflict in West Asia on February 28.
Russia accounted for more than 51% of India’s oil imports in July, an all-time high, up from just a little less than 50% in the previous month, the latest official data shows. An analysis of Commerce and Industry Ministry data shows India imported 110.4 lakh tonnes of Russia oil in July, the latest month for which data is available.
U.S. is India’s most important trading partner, as evident in its imports from India. In 2025, the U.S. bought about $92 billion worth of Indian merchandise, almost four times the $24 billion it bought in 2010. Its share of India’s merchandise exports nearly doubled over the period.
Even as the Trump administration has repeatedly turned to tariffs, New Delhi has been rapidly expanding its network of trade agreements, opening up markets across Europe, West Asia and elsewhere. But can these new markets meaningfully reduce India’s dependence on the U.S.?
How the U.S. tariff regime has been changing
India is not alone in facing U.S. tariffs. On April 2, 2025, the Trump administration announced a 10% additional tariff on imports from almost all trading partners, along with higher country-specific rates for dozens of economies. India was assigned a 26% rate, while other major trading partners including the European Union, Japan and South Korea were also placed above the 10% baseline. The higher country-specific tariffs were suspended days later for most countries, leaving the 10% baseline in place. China was treated separately and faced substantially higher rates during the ensuing tariff dispute.
U.S. Section 301 tariffs, as of July 2026
Tariff rates vary by country. For some, the rate is an additional duty on top of existing tariffs, while for others it is a total rate that includes existing duties.
In July 2025, the U.S. announced a 25% rate for India, which it then hiked to 50% as a penalty for importing Russian oil. The additional Russian-oil tariff was removed in February 2026, when India and the U.S. announced a framework for an interim trade agreement.
The tariff regime changed again in 2026. After the U.S. Supreme Court struck down the use of emergency economic powers for the reciprocal tariffs, the administration turned to other provisions of U.S. trade law. A temporary 10% import surcharge under Section 122 took effect on February 24 and remained in force until July 24.
In July, the U.S. Trade Representative imposed new Section 301 tariffs on 60 economies following an investigation into forced-labour import restrictions. The rates varied by country, from 10% for India, the UK and several others to 12.5% for many of the economies covered.
Since July, around 55% of India’s exports to the U.S. have faced this additional 10% Section 301 duty. The remaining 45% are outside its scope, including generic pharmaceuticals, smartphones and products already subject to separate Section 232 tariffs such as steel, aluminium and auto parts.
