US imposes additional tariffs on India for buying oil from Russia

• The United States has imposed an additional 25% ad valorem duty on certain imports from India, effective 27 August 2025, raising the total tariff rate to 50%.
• According to the President's Executive Order, the tariff is a response to India's indirect importation of Russian oil.
• Companies importing goods from India must reassess their import strategies and pricing structures to accommodate the new tariff rates.
• Businesses should analyze their supply chains for potential impacts and consult with legal and trade advisors for compliance assistance.

Key takeaways

United States (US) President Trump issued an Executive Order on 6 August 2025, imposing an additional 25% ad valorem duty on certain imports from India due to its indirect importation of Russian oil, increasing the cumulative additional tariff on Indian goods to 50% ad valorem.

The new tariffs will take effect Wednesday, 27 August 2025, with specific exceptions for goods already in transit.

Background

The Executive Order, titled "Addressing Threats to the United States by the Government of the Russian Federation," addresses the ongoing national emergency declared in response to the actions of the Government of the Russian Federation regarding Ukraine. This Executive Order builds upon Executive Order 14066, which prohibited the importation of certain products of Russian origin, including crude oil and petroleum products.

President Trump has determined that the Government of India is currently involved in the direct or indirect importation of Russian oil. Considering this, the Executive Order imposes additional tariffs on goods imported from India as a measure to reinforce US economic interests.

Key provisions of the Executive Order

Imposition of additional tariffs

Effective 27 August 2025, articles imported from India will be subject to an additional ad valorem duty of 25%, increasing the cumulative International Emergency Economic Powers Act (IEEPA) tariffs on imports from India to 50% ad valorem. This duty will apply to goods entered for consumption or withdrawn from warehouses for consumption, with the following exceptions:

• Goods that were loaded onto a vessel at the port of loading and in transit before the effective date of the new duty
• Goods that are entered for consumption or withdrawn from warehouses for consumption before 12:01 a.m. eastern daylight time on 17 September 2025

Scope of duties and stacking

The additional ad valorem duty imposed by the Executive Order is in addition to any other applicable duties, fees, taxes or charges on such imports — including tariffs announced in April 2025 under Executive Order 14257. However, it will not apply to articles that are subject to existing or future actions under section 232 of the Trade Expansion Act of 1962 or exempted on the list of articles set forth in Annex II to Executive Order 14257.

Actions for businesses to consider

Affected companies should consider the following actions:

Companies importing goods from India should evaluate the likely implications of the 50% tariff on their import strategies and pricing structures.
Businesses should analyze their supply chains to identify potential impacts from the increased tariffs and consider alternative sourcing options if necessary.
Entities should consult with legal and trade advisors to navigate the complexities of the new tariff structure and ensure compliance with the latest Executive Order.

For additional information concerning this Alert, please contact:

Ernst & Young LLP (United States), Global Trade

• Sergio Fontenelle, New York 
• Lynlee Brown, San Diego 
• Nathan Gollaher, Chicago 
• Michael Heldebrand, San Jose 
• Helen Xiao, Chicago 
• Bryan Schillinger, Houston
• Jay Bezek, Charlotte 
• Prentice Wells, San Jose 
• Shane Williams, Houston 
• Renata Natalino, San Francisco 
• Parag Agarwal, New York 
• Nesia Warner, Austin 
• Celine Petersen, Chicago
• Cody Davis, Charlotte 
• Tanna Johnson, Denver 
• Christopher Bourdganis, Detroit 
• Ilona van den Eijnde, New York 
• James Lessard-Templin, Portland 
• Sundar Markandan, Irvine 
• Max Patel, Charlotte

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor