President Donald Trump said the United States will levy a 25% tariff on all imports from India beginning 1 August, escalating pressure on New Delhi after months of inconclusive talks. Trump also signalled an unspecified penalty linked to India’s purchases of Russian oil and its participation in the BRICS bloc, but told reporters negotiations on a bilateral trade accord were still under way. Indian officials indicated they would continue pursuing a wider agreement with Washington and hope to conclude one by the autumn, while regarding the tariff hike as a temporary measure. The planned duty exceeds the rates Washington recently set for other partners—20% on Vietnam, 19% on Indonesia and 15% on Japan and the European Union—underscoring the severity of the move. Goods worth about $87 billion, including labour-intensive exports such as textiles, footwear, furniture and jewellery, could be affected; pharmaceuticals and a handful of strategic products remain exempt. Financial markets responded swiftly. The rupee fell to 87.74 per dollar, its weakest level in more than five months, and the benchmark Nifty 50 and Sensex indices slipped roughly 0.6%. Economists at several banks warned the tariff could shave up to 40 basis points from India’s growth in the fiscal year to March 2026 and dent its appeal as an alternative manufacturing hub to China. At home, Prime Minister Narendra Modi faced criticism from opposition lawmakers, who called the tariff threat a diplomatic failure and demanded an explanation in parliament. India’s commerce ministry said it was analysing the U.S. announcement and would “take all steps necessary to protect national interest” while remaining committed to a “fair, balanced and mutually beneficial” trade deal with Washington.