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By Brendan Cole
Senior Reporter
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India's Prime Minister Narendra Modi has responded to President Donald Trump increasing tariffs on certain Indian goods to 50 percent.
"I know I'll have to pay a heavy price, but I'm ready. India is ready," Modi said, according to Indian media.
It came after Trump issued an executive order on Wednesday hitting the country with an additional 25 percent tariff for its continued purchasing of Russian oil, increasing overall duties on certain exports to 50 percent. The new tariffs will start from August 27.
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Alex Adamo, CEO of negotiation firm The Commercialiser, told Newsweek Thursday that Trump's executive order is about testing how far he can push Modi.
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Why It Matters
India has taken advantage of discounted Russian oil that Moscow offered friendly countries after western-led sanctions were introduced to curb Vladimir Putin's war machine.
India's role as Russia's second biggest purchaser of oil has irked Trump who sees hitting Moscow's energy revenues as a tool to force Putin to the negotiating table.
Modi's comments suggest a defiance in face of these measures, despite the leaders' previous warm ties.
What To Know
Trump's executive order announced a doubling of tariffs on India, adding 25 percent to the 25 percent he had previously announced which go into effect in the next 21 days.
Trump's order took aim at India for "directly or indirectly importing Russian Federation oil," and so now the country has one of the world's highest levies on its goods entering the U.S.
There are still exemptions for goods already covered under other sector-specific tariffs, such as steel and aluminium, while categories like pharmaceuticals may still be targeted.
Last year, India was the 10th largest importer into the U.S. selling $87 billion worth of goods, according to Commerce Dept. data and in the last quarter, produced 44 percent of U.S. smartphones, more than any other country.
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India responded to Trump's latest measures with a statement Wednesday that said that Trump's measures were "unfair, unjustified and unreasonable" and would take actions to protect its national interests.
U.S. negotiators are scheduled to visit India on August 25 and Indian outlet Business Today reported that tariffs could be cut if India offers concessions or opens up its dairy and agriculture sectors.
But Modi has strongly indicated India is not willing to do this and he said Thursday that the priority was the interest of India's farmers and his government "will never compromise" on their interests.
Adamo told Newsweek that Trump is using the same tactic he did with NATO on defense spending and Mexico on border control and that if Modi gives in easily, the U.S. will return with bigger demand.
He said that Modi can respond by saying India is open to reducing Russian oil imports if the U.S. guarantees price stability, offers viable energy alternatives, or fast-tracks key defense partnerships.
Meanwhile, Yuriy Boyechko, CEO of Hope for Ukraine, welcomed Trump's pressure on India as the right strategy to end the war.
He told Newsweek that if China continues buying Russian oil but India stops, Russia would lose 38 percent of its oil export revenue, which would be a significant reduction in budget revenues and a major financial blow to Russia.
What People Are Saying
Modi said Thursday: "For us, the interest of our farmers is our top priority. India will never compromise on the interests of farmers, fishermen and dairy farmers.
He added: "I know we will have to pay a heavy price for it and I am ready for it. India is ready for it."
India's Ministry of External Affairs said it was: "extremely unfortunate that the U.S. should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest."
Alex Adamo, CEO of negotiation firm The Commercialiser, told Newsweek: "This moment is not just a policy decision. It is a test of posture. If Modi folds, the U.S. will set the tempo for the next five years. If he responds strategically, India earns room to shape the agenda."
Yuriy Boyechko is the CEO of Hope for Ukraine told Newsweek: "Russia is spending nearly $1 billion per day on its war in Ukraine. If President Trump can pressure India to stop buying Russian oil, Putin could run out of money to fund the war very quickly, since oil exports are Russia's primary source of revenue."
What Happens Next
When Washington pledged to penalize anyone buying Iranian oil during Trump's first term, India swiftly complied and so the outcome of talks on August 25 will be eagerly awaited.
Regarding Russia, Trump has teased an imminent meeting with Putin who has just met with his special envoy Steve Witkoff.
Whether targeting India's purchases of Russian oil will force Putin to the table is unclear, pressure on his economy is growing with a U.S bill vowing levies of up to 500 percent on countries that buy Russian oil is making its way through Congress.
Also, the EU's 18th package of sanctions banning refined products made from Russian crude comes into effect in January.
Update 08/07/25, 05:03 a.m. ET: This article has been updated with a further information and comment.
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