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Reuters

  • Trump tariffs rattle India’s markets, cloud growth outlook

    Trump tariffs rattle India’s markets, cloud growth outlook

    MUMBAI, July 31: India’s rupee plunged toward a record low and equity indexes declined on Thursday after U.S. President Donald Trump slapped steeper-than-expected tariffs on Indian goods, with analysts warning of sustained pressure on the country’s growth.

    Trump to impose 25% tariff on India from Aug 1

    The 25% tariffs announced could shave off the South Asian nation’s growth in 2025-26 by up to 40 basis points, with the threat of additional penalties further clouding the outlook, economists said.

    India’s benchmark equity indices, the Nifty 50 and BSE Sensex, fell about 0.6% each, while the rupee declined to an over five-month low of 87.74 before paring losses amid likely dollar-selling intervention by the central bank.

    The Indian rupee is within touching distance of the record low of 87.95 it hit in February.
    “88.00 looms as a big level on the charts and likely a focus for RBI as well,” said Brad Bechtel, head of global FX at Jefferies.

    “Will be interesting to see if they allow the currency to depreciate through that level to offset the impact of tariffs or if they fight to maintain currency ‘stability’. I think they let it go through, in which case 90 becomes a big level to watch.”

    Trump blasts India, Russia as ‘dead economies’

    IMPACT ON GROWTH AND INVESTMENT

    Analysts warned that a dent to New Delhi’s manufacturing ambitions could hamper growth in the world’s fifth-largest economy.

    “If these tariffs remain in place, they could undermine India’s growing appeal to businesses seeking trade diversion in low-value-added manufacturing sectors,” said Raphael Luescher, Co-Head of EM equities at Vontobel.

    Goldman Sachs economist Santanu Sengupta estimated a 30-bps hit to growth once the tariffs are imposed, adding that “elevated policy uncertainty in the U.S. can cause Indian firms, particularly those exposed to U.S. tariffs, to postpone investment decisions.”

    However, DBS Bank said downside risks are likely to be offset by fiscal support for labour-intensive industries and smaller exporting firms, alongside further rate cuts.

    “Despite limited tariff arbitrage, we are still of the view that the economy will continue to benefit from trade diversion flows as manufacturers diversify and derisk from other production bases, including China,” DBS economists wrote.

    GEOPOLITICAL BALANCING ACT

    Alison Shimada, head of Total Emerging Markets Equity at Allspring Global Investments, said the direct macroeconomic impact may be limited given India’s exports to the U.S. account for just 2–3% of GDP.

    But she noted that “India wishes to maintain constructive trade relations with both Russia and the U.S.,” and could consider increasing imports from the U.S. to ease tensions.

    “The stock market may react negatively in the short term as the INR is depreciating on the back of this news,” Shimada added.

    “However, there is a level of scepticism in the markets until the final agreements are released. Therefore, fundamentals will remain a key focus since India earnings season is ongoing.”

    The Indian government expects the economy to grow at 6.3%–6.8% in 2025–26.

  • Indian state refiners pause Russian oil purchases, sources say

    Indian state refiners pause Russian oil purchases, sources say

    NEW DELHI: India’s state refiners have stopped buying Russian oil in the past week as discounts narrowed this month and U.S. President Donald Trump warned against purchasing oil from Moscow, industry sources said.

    India, the world’s third-largest oil importer, is the biggest buyer of seaborne Russian crude.
    The country’s state refiners – Indian Oil, Hindustan Petroleum, Bharat Petroleum and Mangalore Refinery Petrochemical Ltd – have not sought Russian crude in the past week or so, four sources familiar with the refiners’ purchase plans told Reuters.

    IOC, BPCL, HPCL, MRPL and the federal oil ministry did not immediately respond to Reuters’ requests for comment.

    The four refiners regularly buy Russian oil on a delivered basis and have turned to spot markets for replacement supply – mostly Middle Eastern grades such as Abu Dhabi’s Murban crude and West African oil, sources said.

    Private refiners Reliance Industries and Nayara Energy are the biggest Russia oil buyers in India, but state refiners control over 60% of India’s overall 5.2 million barrels per day refining capacity.

    On July 14, Trump threatened 100% tariffs on countries that buy Russian oil unless Moscow reaches a major peace deal with Ukraine.

    Trump blasts India, Russia as ‘dead economies’

  • Trump’s call broke deadlock in Thailand-Cambodia border crisis

    Trump’s call broke deadlock in Thailand-Cambodia border crisis

    First came a push from the Malaysian premier, then China reached out, but it was only after U.S. President Donald Trump called Thailand’s leader last week that Bangkok agreed to talks with Cambodia to end an escalating military conflict.

    A flurry of diplomatic efforts over a 20-hour window sealed Thailand’s participation in ceasefire negotiations with Cambodia, hosted in Malaysia, halting the heaviest fighting between two Southeast Asian countries in over a decade.

    Reuters interviewed four people on both sides of the border to piece together the most detailed account of how the truce was achieved, including previously unreported Thai conditions for joining the talks and the extent of Chinese involvement in the process.

    When Trump called Thai Acting Prime Minister Phumtham Wechayachai on Saturday, two days after fighting erupted along a 200-km-long stretch of the border, Bangkok had not responded to mediation offers from Malaysia and China, said a Thai government source with direct knowledge.

    “We told him that we want bilateral talks first before declaring a ceasefire,” the source said, asking not to be named because of the sensitivity of the issue.

    Thailand had already made it clear that it favoured bilateral negotiation and initially did not want third-party mediation to resolve the conflict.

    On Sunday, a day after his initial call, Trump said that Thailand and Cambodia had agreed to meet to work out a ceasefire, and that Washington wouldn’t move ahead with tariff negotiations with both until the conflict had ended.

    The source said as the Thai and Cambodian foreign ministries started talking, following Trump’s call, Bangkok set out its terms: the meeting must be between the two prime ministers and at a neutral location.

    “We proposed Malaysia because we want this to be a regional matter,” the source said.
    “The U.S. really pushed for the meeting,” a second Thai source said, “We want a peaceful solution to the conflict so we had to show good faith and accept.”

    A Thai government spokesperson did not immediately respond to questions from Reuters.
    Cambodia had accepted the initial Malaysian offer for talks but it was Thailand that did not move ahead until Trump’s intervention, said Lim Menghour, a Cambodian government official working on foreign policy.

    Prime Minister Hun Manet’s government also kept a channel open with China, which had shown interest in joining any peace talks between the neighbours, he said, reflecting Phnom Penh’s close ties to Beijing. “We exchanged regular communication,” Lim Menghour said.

    GOOD FAITH

    On Monday, Phumtham and Hun Manet went to the Malaysian administrative capital of Putrajaya, where they were hosted by Prime Minister Anwar Ibrahim, also the current chair of the 10-member Association of Southeast Asian Nations regional bloc.
    At the end of their talks, the two leaders stood on either side of Anwar, who read out a joint statement that said Thailand and Cambodia would enter into a ceasefire from midnight and continue dialogue.

    The rapid parleys echoed efforts to diffuse severe border clashes between Thailand and Cambodia in 2011, which took several months including mediation efforts by Indonesia, then chair of ASEAN.

    But those talks had not directly involved the U.S. and China. The fragile ceasefire was holding as of Thursday, despite distrust on both sides, and neither military has scaled down troop deployment along the frontier.

    Thailand and Cambodia have, for decades, quarrelled over undemarcated parts of their 817 km (508 miles) land border, which was first mapped by France in 1907 when the latter was its colony.

    In recent months, tensions began building between the neighbours after the death of a Cambodian soldiers in a skirmish in May and escalated into both militaries bolstering border deployments, alongside a full-blown diplomatic crisis.

    After a second Thai soldier lost a limb last week to a landmine that Thailand alleged Cambodian troops had planted, Bangkok recalled its ambassador to Phnom Penh and expelled Cambodia’s envoy. Cambodia has denied the charge. The fighting began soon after.

    Since the ceasefire deal, Hun Manet and Phumtham have been effusive in their praise for Trump, who had threatened 36% tariffs on goods from both countries coming to the U.S., their biggest export market.

    The Thai sources did not say whether tariff talks had been impacted by the border clashes. Lim Menghour said after the “positive talks, President Donald Trump also showed positive developments” regarding tariffs, without elaborating.

    Trump said tariff negotiations with both countries resumed after the ceasefire agreement. U.S. Commerce Secretary Howard Lutnick said on Wednesday that Washington has made trade deals with Cambodia and Thailand, but they are yet to be announced.

  • Gold gains on tariff uncertainty ahead of August 1 deadline

    Gold gains on tariff uncertainty ahead of August 1 deadline

    July 31, 2025: Gold rates rose 1% on Thursday as traders turned to the safe haven asset amid ongoing tariff uncertainty, as U.S. President Donald Trump’s August 1 deadline to end negotiations approaches.

    Spot gold was up 1% at $3,308.07 per ounce, as of 0855 a.m. ET (12:55 GMT).

    U.S. gold futures gained 0.3% to $3,306.10.

    “We’ve seen an uptick in trade uncertainty as we approach this August 1st deadline for tariffs… just a little bit of a revival of the safe haven bid,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

    “The midpoint of the broader range is sort of around $3,312/oz and we tested that level today. I’d probably be a little bit more optimistic if we’re able to set new highs for the week.”

    Trump on Wednesday issued a blitz of tariff announcements on imports of copper and goods from Brazil and South Korea, ahead of an August 1 deadline for higher U.S. tariff rates.

    U.S. inflation increased in June as tariffs on imports started raising the cost of some goods. The PCE index rose 0.3% last month after an upwardly revised 0.2% gain in May.

    Meanwhile, the U.S. central bank held interest rates steady on Wednesday, and Fed Chair Jerome Powell’s comments after the decision undercut confidence that borrowing costs would begin to fall in September.

    Gold thrives in a low-interest rate environment as it is a non-yielding asset.

    Investors now await the U.S. non-farm payrolls data on Friday for more clues on the Fed’s rate path.

    Spot silver fell 1.3% at $36.66 per ounce, its lowest since July 7, platinum slipped 0.5% to $1,306.98, while palladium gained about 0.9% to $1,215.79.

    “It would not be surprising if strong selling pressure in silver futures is partly due to sympathy selling amid the big copper market meltdown seen the past two days,” Jim Wyckoff, a senior analyst at Kitco Metals said.

    Trump surprised the market on Wednesday by saying the U.S. would impose a 50% tariff on copper pipes and wiring, dragging down U.S. copper prices more than 20% on the COMEX exchange .

  • Microsoft races past $4 trillion valuation after solid results

    Microsoft races past $4 trillion valuation after solid results

    Microsoft soared past $4 trillion in market valuation on Thursday, becoming the second publicly traded company after Nvidia to surpass the milestone following a blockbuster earnings report.

    The technology behemoth forecast a record $30 billion in capital spending for the first quarter of the current fiscal year to meet soaring AI demand and reported booming sales in its Azure cloud computing business on Wednesday.

    “It is in the process of becoming more of a cloud infrastructure business and a leader in enterprise AI, doing so very profitably and cash generatively despite the heavy AI capital expenditures,” said Gerrit Smit, lead portfolio manager, Stonehage Fleming Global Best Ideas Equity Fund.
    Redmond, Washington-headquartered Microsoft first cracked the $1-trillion mark in April 2019.

    Its move to $3 trillion was more measured than technology giants Nvidia and Apple, with AI-bellwether Nvidia tripling its value in just about a year and clinching the $4-trillion milestone before any other company on July 9.

    Lately, breakthroughs in trade talks between the United States and its trading partners ahead of President Donald Trump’s August 1 tariff deadline have buoyed stocks, propelling the S&P 500 and the Nasdaq to record highs.

    Microsoft’s multibillion-dollar bet on OpenAI is proving to be a game changer, powering its Office Suite and Azure offerings with cutting-edge AI and fueling the stock to more than double its value since ChatGPT’s late-2022 debut.

    Its capital expenditure forecast, its largest ever for a single quarter, has put it on track to potentially outspend its rivals over the next year.

    Meta Platforms also doubled down on its AI ambitions, forecasting third-quarter revenue that blew past Wall Street estimates as artificial intelligence supercharged its core advertising business.

    The social media giant upped the lower end of its annual capital spending by $2 billion – just days after Alphabet made a similar move – signaling that Silicon Valley’s race to dominate the artificial-intelligence frontier is only accelerating.

    Wall Street’s surging confidence in the company comes on the heels of back-to-back record revenues for the tech giant since September 2022.

    The stock’s rally had also received an extra boost as the tech giant trimmed its workforce and doubled down on AI investments — determined to cement its lead as businesses race to harness the technology.

    While sweeping U.S. tariffs had investors bracing for tighter business spending, Microsoft’s strong earnings have shown that the company’s books are yet to take a hit from the levies.

  • India 72-2 at lunch v England on first day of key final Test

    India 72-2 at lunch v England on first day of key final Test

    LONDON: India negotiated an awkward first morning of the final India vs England Test at the Oval relatively smoothly on Thursday, reaching 72-2 at lunch as the hosts, leading the series 2-1, failed to take full advantage of overcast conditions ideal for their all-seam attack.

    England’s bowlers, without injured captain Ben Stokes or rested paceman Jofra Archer, ran in hard enough and extracted some good bounce from what has been a very batter-friendly wicket this season, but generally lacked a cutting edge.

    Recalled Gus Atkinson was England’s liveliest bowler and he struck in the fifth over as Yashasvi Jasiwal was beaten by a ball that cut back sharply and thudded into his pad.

    It was given not out but Ollie Pope, in as captain in place of Stokes for the final India vs England game and who had a remarkable 14 unsuccessful reviews when leading the team last year, finally got one right as DRS overturned the decision to dismiss the opener for two.

    KL Rahul, with over 500 runs to his name from the first four matches, looked relatively untroubled before trying to cut a ball from Chris Woakes that was too close to his body and succeeded only in playing on to depart for 14.

    Read more: Injured Stokes ruled out of final Test v India, Archer rested

    At 38-2, England and a packed Oval crowd sensed an opportunity but, with some weak sunshine replacing the dark clouds, things started to look more comfortable for the tourists, who need a victory to square the series.

    India’s number three Sai Sudharsan was very watchful in the first hour but started to time the ball nicely and was unbeaten on 25.

    Captain Shubman Gill, averaging over 90 for the ongoing India vs England series and probably key to India’s hopes, was not out on 15 when the players went off for an early lunch after a shower arrived.

  • Voice actors push back as AI threatens dubbing industry

    Voice actors push back as AI threatens dubbing industry

    PARIS/BERLIN, July 30: Boris Rehlinger may not turn heads on the streets of Paris, but his voice is instantly recognisable to millions of French filmgoers. As the French voice of Ben Affleck, Joaquin Phoenix, and even Puss in Boots, Rehlinger is a star behind the scenes — and now he is fighting to keep his craft alive in the age of AI.

    “I feel threatened even though my voice hasn’t been replaced by AI yet,” the actor, who is part of a French initiative, TouchePasMaVF, to protect human-created dubbing from artificial intelligence, told Reuters.

    He said there was a team of professionals, including actors, translators, production directors, dialogue adapters and sound engineers, to ensure audiences barely notice that the actor on screen is speaking a different language than they hear.

    The rise of global streaming platforms such as Netflix, which relies heavily on dubbing to make global hits such as “Squid Game” and “Lupin”, has amplified demand.

    Consumer research firm GWI says 43% of viewers in Germany, France, Italy and Britain prefer dubbed content over subtitles.

    The market is expected to grow to $4.3 billion in 2025, reaching $7.6 billion by 2033, according to Business Research Insights.

    That growth could also amplify demand for the so-far nascent technology-based solutions, with platforms competing for subscribers and revenue, and seeking to win over advertisers from their rivals by emphasising their increasing reach.

    But as AI-generated voices become more sophisticated and cost-effective, voice actor industry associations across Europe are calling on the EU to tighten regulations to protect quality, jobs and artists’ back catalogues from being used to create future dubbed work.

    “We need legislation: Just as after the car, which replaced the horse-drawn carriage, we need a highway code,” Rehlinger said.

    Worries over technology in the movie industry and whether it will replace the work of humans are not new. AI has been a flashpoint in Hollywood since the labour unrest of 2023, which resulted in new guidelines for the use of the technology.

    Netflix co-CEO Ted Sarandos said this month that the company used generative AI to produce visual effects for the first time on screen in the original series “El Eternauta (The Eternaut)”.

    It has also tested GenAI to synchronise actors’ lip movements with dubbed dialogue to improve the viewing experience, according to three sources familiar with the work.

    These experiments rely on local voice actors to deliver the lines, rather than use AI to synthetically translate the on-screen performer’s voice into another language.

    Such a use of AI for dubbing is permitted under the new SAG-AFTRA actors’ union contract, which covers voice-over dubbing from foreign languages into English. It also requires that the actor rendering the dubbing service be paid.

    Netflix declined to comment on its use of AI in dubbing when asked by Reuters.

    INTELLECTUAL PROPERTY

    Such test-runs by an industry giant will do little to allay the fears of dubbing actors.
    In Germany, 12 well-known dubbing actors went viral on TikTok in March, garnering 8.7 million views, for their campaign saying “Let’s protect artistic, not artificial, intelligence”.

    A petition from the VDS voice actors’ association calling on German and EU lawmakers to push AI companies to obtain explicit consent when training the technology on artists’ voices and fairly compensate them, as well as transparently label AI-generated content, gained more than 75,500 signatures.

    When intellectual property is no longer protected, no one will produce anything anymore “because they think ‘tomorrow it will be stolen from me anyway’,” said Cedric Cavatore, a VDS member who has dubbed films and video games including the PlayStation game “Final Fantasy VII Remake”.

    VDS collaborates with United Voice Artists, a global network of over 20,000 voice actors advocating for ethical AI use and fair contracts.

    In the United States, Hollywood video game voice and motion capture actors this month signed a new contract with video game studios focused on AI that SAG-AFTRA said represented important progress on protections against the tech.

    STUDIOS EXPERIMENT

    Some studios are already cautiously exploring AI.

    Eberhard Weckerle, managing director of the Neue Tonfilm Muenchen studio, hopes AI and human dubbing can one day coexist.

    “The fear is that AI will be used to make something as cheap as possible and then people will say, ‘Okay, I’ll accept that I’ll have poorer quality’. And that would actually be the worst thing that could happen to us,” said the sound engineer whose studio worked on the German version of “Conclave” and is currently dubbing Guy Ritchie’s new film.

    Earlier this year, the German-dubbed version of streaming service Viaplay’s Polish crime series “Murderesses” was removed after criticism from viewers about the monotony of its AI-generated dialogue.

    The streamer had decided to look into alternative dubbing options due to how prohibitively expensive going through the traditional channels can be in Germany.

    The hybrid dubbing, created with Israeli startup DeepDub, used a mix of human and AI voices. DeepDub did not respond to an emailed request for comment.

    “We’ll continue offering subtitles and reserve dubbing for select content,” said Vanda Rapti, the executive vice president of ViaPlay Group, ViaPlay Select & Content distribution.

    Despite the disquiet over that series, other potential viewers seem more sanguine.

    According to GWI, nearly half of viewers said their opinion would not change if they learned that the content they liked was generated by AI.

    Some 25% said they would like it slightly less, and only 3% said they would like it much more.

    ‘INTEREST IS HUGE’

    Stefan Sporn, CEO of Audio Innovation Lab, which used AI to dub the Cannes Film Festival entry “Black Dog” from Chinese to German, believes AI will reshape, but not replace, voice work.

    Humans will always be needed for emotion, scripting, and language nuance, he said, “just not to the same extent”.

    Audio Innovation Lab’s technology alters the original actor’s voice to match the target language, aiming for authenticity and efficiency.

    “Interest is huge,” said Sporn, adding that producers, studios and advertisers all want to know how well it works.

    Another startup, Flawless AI, bills itself as an ethical AI company that works with local voice actors and uses its technology to match the on-screen actor’s lip movements to the different languages.

    “When AI technologies are used in the right way, they are a silver bullet to change how we can film-make in a new way,” co-CEO Scott Mann said.

  • UK Pound heads for worst month since 2022

    UK Pound heads for worst month since 2022

    LONDON: The UK Pound (GBP) headed towards its largest monthly loss against the US Dollar (USD) since September 2022 on Thursday, reflecting growing confidence among investors in the outlook for the U.S. economy and increasing pessimism over the British one.

    Pound sterling was down 0.15% on the day at $1.322 and weakened against the euro, which rose 0.4% to 86.46 pence.

    In July, the pound has fallen by 3.7%, the most since losing 3.9% and hitting a record low in September 2022, during then-Prime Minister Liz Truss’s budget-induced market crisis.

    The UK Pound is still up nearly 6% against the dollar this year, but that’s softened dramatically from a year-to-date gain of almost 10% at the start of the month.

    Following Wednesday’s two-day policy meeting, the Federal Reserve left U.S. interest rates unchanged, as expected, and Chair Jerome Powell gave no indication of when they might fall again.

    In the meantime, U.S. data has painted a far rosier picture of the world’s largest economy than UK data has of the British economy. U.S. data releases this week including second-quarter economic activity and some measures of employment have added to that.

    The Citi U.S. economic surprise index has overtaken its UK counterpart this week for the first time since April.

    With the Bank of England expected to almost certainly deliver two more rate cuts this year, according to money markets, and a far lower chance of two more cuts from the Fed, investors are ditching the pound.

    Weekly data from the U.S. Commodity Futures Trading Commission shows speculators are neutral on the pound, having whittled back the bullish positioning that had prevailed continuously since February.

    GBP to PKR- Latest Updates

    “Although not in receipt of any tier-one data releases this week, sterling has still had a bumpy ride,” analysts at Monex said in a note.

    “Slowing U.S. growth and UK fiscal concerns both point to sterling underperformance moving forward. As such, we see little room for sterling to rally sustainably from current levels sub-$1.33,” they said.

  • US Senate rejects bills to block arms sales to Israel over Gaza

    US Senate rejects bills to block arms sales to Israel over Gaza

    US Senate lawmakers have failed to pass two resolutions that would have blocked arms sales to Israel in response to civilian casualties in Gaza and the ongoing starvation of the territory’s population.

    Vermont independent Senator Bernie Sanders introduced the bills, which failed to pass by 73 to 24 and 70 to 27 in the 100-member chamber in voting late on Wednesday.

    All votes in favour of Wednesday’s resolutions came from Democrats, with all of President Donald Trump’s fellow Republicans opposed.

    Despite the loss, Sanders said he was pleased the majority of Democrats backed the effort this time around.

    “The tide is turning. The American people do not want to spend billions to starve children in Gaza,” Sanders said.

    “The Democrats are moving forward on this issue, and I look forward to Republican support in the near future,” he added.

    It is worth mentioning here that Gaza’s food stocks have been running out since Israel cut off all supplies to the territory in March. That blockade was lifted in May but with restrictions that Israel says are needed to prevent aid being diverted to militant groups.

    As stocks ran out, the situation escalated in June and July, with the World Health Organization warning of mass starvation and images of emaciated children shocking the world. The Gaza health ministry says 151 people, including 89 children, have died of malnutrition, most in recent weeks. A global hunger monitor said on Tuesday that a famine scenario is unfolding.

    This week Israel announced steps to allow more aid in, including pausing fighting in some locations, air dropping food and offering more secure routes. The United Nations said the scale of what is needed is vast in order to stave off famine and avert a health crisis.

  • Trump says US, India still negotiating after 25% US tariff threat

    Trump says US, India still negotiating after 25% US tariff threat

    President Donald Trump said the United States is still negotiating with India on trade after announcing earlier in the day the U.S. would impose a 25% tariff on goods imported from the country starting on Friday.

    The 25% tariff, as well as an unspecified penalty announced by Trump in a morning social media post, would strain relations with the world’s most populous democracy.

    Later at the White House, the Republican president indicated there was wiggle room.

    “They have one of the highest tariffs in the world now, they’re willing to cut it very substantially,” Trump told reporters. “We’re talking to India now – we’ll see what happens … You’ll know by the end of this week.”

    The 25% figure would single out India more severely than other major trading partners, and threaten to unravel months of talks between the two countries, undermining a strategic partner of Washington’s and a counterbalance to China.

    What the penalty would be was not clear. Trump indicated initially, in a post on the Truth Social website, that the penalty was a response to India buying Russian arms and oil and its “obnoxious non-monetary Trade Barriers.”

    When asked about the penalty later at the White House, he said it was partly due to trade issues and partly because of India’s involvement in the BRICS group of developing nations, which he described as hostile to the U.S.

    In July, Trump said the U.S. will impose an additional 10% tariff on imports from any countries aligning themselves with the “Anti-American policies” of the BRICS.

    The India announcement came as countries face a Friday deadline to reach deals on reciprocal tariffs or have a Trump-imposed tariff slapped on their exports. The White House launched a blizzard of other trade policy announcements on Wednesday.

    EARLY WARNING

    The White House had previously warned India about its high average applied tariffs – nearly 39% on agricultural products – with rates climbing to 45% on vegetable oils and around 50% on apples and corn.

    “While India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high,” Trump wrote in the Truth Social post.

    “They have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD!”

    In response to his Truth Social post, the Indian government said it was studying the implications of Trump’s announcements and remained dedicated to securing a fair trade deal.

    “India and the U.S. have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective,” it said.

    Russia continued to be the top oil supplier to India during the first six months of 2025, making up 35% of overall supplies.

    The United States, the world’s largest economy, currently has a $45.7 billion trade deficit with India, the fifth largest.

    White House economic adviser Kevin Hassett said Trump has been frustrated with the progress of trade talks with India and believed the 25% tariff announcement would help the situation.

    The new U.S. tax on imports from India would be higher than on many other countries that struck deals with the Trump administration recently. The tariff on Vietnamese exports is set at 20% and Indonesia’s at 19%, while the levy for Japanese and European Union exports is 15%.

    “This is a major setback for Indian exporters, especially in sectors like textiles, footwear, and furniture, as the 25% tariff will render them uncompetitive against rivals from Vietnam and China,” said S.C. Ralhan, president of the Federation of Indian Export Organisations.

    The chart shows the share of top five countries for India exports with U.S. accounting for nearly 25% in past few months

    CONTENTIOUS ISSUES

    U.S. and Indian negotiators have held multiple rounds of discussions to resolve contentious issues, particularly over market access into India for U.S. agricultural and dairy products.

    In its latest statement, India said it attached the utmost importance to protecting and promoting the welfare of its farmers, entrepreneurs, and small businesses.

    “The government will take all steps necessary to secure our national interest, as has been the case with other trade agreements,” it said.

    The setback comes despite earlier commitments by Prime Minister Narendra Modi and Trump to conclude the first phase of a trade deal by autumn and expand bilateral trade to $500 billion by 2030, from $191 billion in 2024.

    On Wednesday, Trump also said he had made a deal with India’s arch South Asian rival Pakistan to develop that country’s oil reserves. “Who knows, maybe they’ll be selling Oil to India some day,” Trump wrote on Truth Social.

    Since India’s short but deadly conflict with Pakistan, New Delhi has been unhappy about Trump’s closeness with Islamabad and has protested, which has cast a shadow over trade talks.

    “Politically, the relationship is in its toughest spot since the mid-1990s,” said Ashok Malik, partner at advisory firm The Asia Group. “Trust has diminished. President Trump’s messaging has damaged many years of careful, bipartisan nurturing of the U.S.-India partnership in both capitals.”

    Besides farm products access, the U.S. had flagged concerns over India’s increasingly burdensome import-quality requirements, among its many non-tariff barriers to foreign trade, in a report released in March.

    The new tariffs will impact Indian goods exports to the U.S., estimated at around $87 billion in 2024, including labor-intensive products, such as garments, pharmaceuticals, gems and jewelry, and petrochemicals.