Amid a sweeping escalation of trade tensions, US President Donald Trump has imposed steep reciprocal tariffs on 69 countries that have not agreed to new trade deals with Washington. The measures, which took effect after a deadline expired yesterday, have sparked market volatility worldwide. Yet, India has made it clear that it will not compromise on national interest, even as it finds itself among the countries subjected to new US tariffs.
Trump announced that India would face a tariff hike in the 25% range, a moderate increase when compared to several others on the list. Syria was hit with the harshest penalty at 41%, followed by Switzerland at 39%, Canada 35%, Iraq at 35%, and both Myanmar and Laos at 30%. In contrast, India finds itself in a relatively better bracket alongside Taiwan and Vietnam.
The tariff for Pakistan has been pegged at 19%, while Thailand saw a reduction from 36% to 19%. Taiwan’s tariff was also lowered significantly, from 32% to 20%. Several other nations including Libya, Serbia, and Algeria are in the 30–35% bracket. Countries not mentioned in Trump’s list will be subjected to a 10% base tariff.
My statement in the Rajya Sabha on India-US Bilateral Trade. https://t.co/pwuBKo9S6h
— Piyush Goyal (@PiyushGoyal) July 31, 2025
However, the more damaging blow for several Asian exporters, including China, comes in the form of a 40% tariff on transshipped products, goods routed through third countries to evade direct tariff hits. China, already facing a 30% tariff, has long relied on countries like Vietnam and the Philippines to route goods to the US at lower tariff costs. Trump’s crackdown on this practice could significantly disrupt China’s export strategies.
India, while impacted by the 25% tariff, has chosen not to yield to Washington’s pressure. President Trump has made it clear that he expects India to open its markets, especially to American dairy, agricultural goods, and genetically modified products, demands that have drawn a firm refusal from New Delhi. Commerce and Industry Minister Piyush Goyal addressed Parliament yesterday, stating unequivocally that India will never enter into an agreement that undermines its national interest.
Goyal clarified that India is not stubborn about a trade agreement and India is trying for a respectful deal that benefits both countries, like the India-UK deal. But the interests of India’s farmers, small traders, entrepreneurs, and workers will not be sacrificed.
India is contributing to almost 16% of global growth. 🇮🇳🌏 pic.twitter.com/0A7e6QgJGD
— Piyush Goyal (@PiyushGoyal) July 31, 2025
India is aiming to conclude a balanced trade deal with the United States by October or November, but not under coercive terms. Goyal reiterated that while negotiations will continue, they will do so without compromising on sovereignty or economic integrity.
The announcement of Trump’s tariff action caused ripples in Indian financial markets. The Sensex plunged nearly 800 points during the early hours of trading yesterday, while the Nifty lost over 200 points. Investors saw wealth erosion of nearly ₹5 lakh crore in the first hour of the trading session. However, the domestic market showed resilience later in the day, with the Sensex recovering nearly 900 points to trim losses and close just 200 points down.
Even the US stock markets reacted negatively. Despite strong quarterly performance from tech giants Microsoft, Meta, and Apple, the Dow Jones Industrial Average dropped 0.74%, the Nasdaq slipped 0.03%, and the S&P 500 declined by 0.37%.
In Asia, markets were largely unsettled by Trump’s tariff war. South Korea’s KOSPI index declined nearly 3%, Japan’s Nikkei fell 0.39%. In Europe, the UK’s FTSE shed 0.05% and Germany’s DAX lost 0.81%. The US dollar index surged past 100 from below 98 last week, propelled by Trump’s hardened trade posture.
Trump’s latest moves indicate a broader strategy to isolate non-compliant nations while rewarding countries willing to play by Washington’s terms. However, India’s response underscores a calibrated resistance, refusing to be cowed into submission, yet remaining open to respectful negotiations.
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