Indian Prime Minister Narendra Modi has vowed not to compromise on the interests of Indian farmers, livestock owners, and fishermen, despite US President Donald Trump’s imposition of a 50% tariff on Indian exports — escalating tensions over trade and India’s continued purchases of Russian oil.
Trump signed an executive order on Wednesday, imposing an additional 25% tariff on top of an existing 25% levy already applied after India failed to finalize a trade agreement before the US`s August 1 deadline.
Speaking at an agricultural conference in New Delhi on Thursday, Modi did not refer directly to the tariffs but affirmed, “I will never compromise on the interests of farmers,” adding that he is prepared to pay a “heavy price” for his stance. He remained silent on the issue of Russian oil, which India has been purchasing in increasing volumes since 2022.
India now joins Brazil at the top of the list of countries facing the highest US tariffs. Brazilian President Luiz Inácio Lula da Silva said he would call Modi to discuss a joint response from the BRICS bloc — including China, Russia, and South Africa — against the US measures.
India`s financial markets reacted calmly. The Nifty 50 index fell slightly by 0.7% while the rupee held steady at ₹87.68 against the dollar. However, export-related stocks, such as textiles, saw sharper declines. Reliance Industries, which processes large volumes of Russian crude, dropped 1.7%.
To stabilize the currency, the Reserve Bank of India reportedly sold dollars in the market on Thursday. The central bank did not comment.
The US is India’s largest market for gems and jewelry, and the industry’s export council called the new tariff “deeply concerning,” warning of major disruptions to supply chains and export earnings. They urged the government to intervene urgently.
Mahindra Group chairman Anand Mahindra expressed concern about the potential fallout, writing on X that “tariff wars carry the risk of unintended consequences.” He emphasized the need for India to enhance its business environment to become more resilient.
Barclays analysts said while the tariffs could cause short-term economic pain, India’s largely domestic-focused economy might soften the blow. The RBI maintained its GDP growth forecast at 6.5% for the fiscal year ending March 2026 but noted that it was still too early to assess the tariff impact.
Sources close to the stalled trade talks pointed to India`s refusal to open its foodgrain and dairy sectors to US competition as a key sticking point. Modi previously rolled back major farm reform bills after mass protests in 2020–21.
The newly announced tariffs will take effect in 21 days, leaving a narrow window for renewed trade negotiations. Analysts say the pressure is now on India to reach a deal quickly to avoid further economic strain.
