U.S. Sanctions and Tariff Bill Creates New Flashpoint in India-U.S. Relations

New Delhi: A sweeping U.S. sanctions and tariff bill has emerged as the latest flashpoint between New Delhi and Washington, adding pressure to ties already strained by U.S. tariffs on Indian goods and Washington's close engagement with India's neighbour Pakistan.

Here is a look at the twists and turns that have shaped India-U.S. ties through President Donald Trump's second term.

FEBRUARY 2025

Trump announced a new tariffs system whereby the U.S. would charge the same tariff rates as India charged.

The countries also agreed to work toward a limited trade deal, and set a target of doubling their bilateral trade to $500 billion by 2030.

APRIL 2025

New Delhi and Washington finalised the terms of reference for bilateral trade talks.

The U.S. imposed a 26% tariff on several Indian imports but paused it for 90 days soon after, instead maintaining a 10% duty on all imports.

JULY 2025

Trump announced a 25% tariff on all Indian goods that he then raised to 50% in August, citing New Delhi's continued purchases of Russian oil.

New Delhi termed the tariff "unfair" and vowed to defend its national interests.

FEBRUARY 2026

Trump announced a trade deal that would cut U.S. tariffs on Indian goods to 18% in exchange for India halting Russian oil purchases and lowering trade barriers.

The countries also released an interim framework for their trade deal.

Later, the U.S. Supreme Court struck down Washington's emergency tariffs, after which Trump announced a temporary 10% duty on India and other countries for 150 days.

JULY 2026

On the expiry of the 150-day period, Trump announced a fresh 10% tariff on imports from India, saying it was among several economies that had not curbed imports made with forced labour.

India said about 45% of its exports to the U.S. constituted products exempted from the duty, adding it remained engaged with Washington on their bilateral trade pact.

SEPTEMBER 2026

The U.S. House of Representatives passed a sanctions and tariff bill intended to increase economic pressure on Russia over its invasion of Ukraine and to expand sanctions on Iran.

The legislation also authorised Trump to impose tariffs of up to 100% on goods from countries including India to reduce their dependence on Russian oil and gas.

New Delhi said it had warned Washington that such moves could impact ties, adding it would work with trade and industry bodies to deal with the bill's implications.