U.S. Imposes 25% Tariff on India Imports in Response to Russian Oil Trade (Updated)
Trade Update • Updated August 25, 2025
Key Points
- President Trump issues new Executive Order targeting countries indirectly supporting Russia.
- 25% tariff imposed on all Indian-origin imports into the U.S.
- India found to be importing Russian oil, directly or indirectly.
- Tariff effective August 27, 2025, with limited transit exemptions.
- Duties stack with existing tariffs, unless specific exemptions apply.
- Foreign Trade Zone entries restricted to privileged foreign status for affected goods.
- Potential for expansion to other countries found importing Russian oil.
- U.S. departments authorized to implement and enforce the new trade measures.
- Order supports national security and foreign policy objectives related to Ukraine.
- CBP Guidance now available. HTS applicability on goods, exemptions and more.
- Federal Register Notice now available, updates Annex, subchapter III of Chapter 99.
On August 6, 2025, President Donald J. Trump signed an new Executive Order continuing the national emergency first declared in 2021 in response to the Russian Federation’s efforts to undermine the sovereignty and territorial integrity of Ukraine. Building on previous measures, including restrictions on Russian-origin crude oil and petroleum products, this new action targets third-party countries indirectly supporting Russia.
Findings and Tariff Scope
Based on findings that India continues to import Russian-origin oil, either directly or indirectly, the order imposes a 25% ad valorem tariff on all imports from India entering the United States.
The Executive Order draws authority from the International Emergency Economic Powers Act (IEEPA), the National Emergencies Act, and key provisions of the Trade Act of 1974, and is part of a broader national security and foreign policy strategy.
Effective Date
The 25% ad valorem duty on Indian-origin goods applies to:
Goods entered for consumption or;
Withdrawn from warehouse for consumption on or after 12:01 a.m. EDT on August 27, 2025 (21 days after the order’s issuance).
Transit Exemptions
Goods are exempt from the new duty if they meet both of the following conditions:
Loaded onto a vessel and in final transit to the U.S. before 12:01 a.m. EDT on August 27, 2025; and
Entered for consumption before 12:01 a.m. EDT on September 17, 2025.
Stacking of Duties and Applicable Exceptions
Additional to Existing Tariffs
The new 25% tariff is stacked on top of all other existing U.S. duties, fees, taxes, and trade measures, unless an exception applies.
Exemptions
The duty does not apply to:
Articles subject to Section 232 actions under the Trade Expansion Act of 1962;
Articles excepted under 50 U.S.C. 1702(b);
Items listed in Annex II of Executive Order 14257, which relates to reciprocal tariff exceptions.
Reciprocal Tariffs May Also Apply
For articles subject to reciprocal duties under Executive Order 14257 (April 2, 2025), such tariffs (e.g., 35% or 40%) may apply in addition to the 25% tariff imposed by this Executive Order.
CBP Guidance – Tariff Scope/HTS Applicability
Scope of the Tariff
Applies broadly to all Indian-origin goods entered for U.S. consumption, or withdrawn from warehouse for consumption.
Excludes certain products covered under HTSUS headings 9903.01.85 – 9903.01.89 and goods carried for personal use in travelers’ accompanied baggage.
The new 25% rate stacks on top of other trade remedies (Section 301, Section 232, antidumping/countervailing duties, etc.).
Key Exemptions
Certain goods are exempted from this duty, including:
In-transit shipments loaded prior to August 27, 2025, provided they enter the U.S. by September 17, 2025 (9903.01.85).
Products identified in Annex II of EO 14257, as clarified in April 2025 (9903.01.86).
Specific categories of steel, aluminum, copper, and passenger vehicles already covered by other tariff measures (9903.01.87).
Humanitarian donations such as food, clothing, or medicine, unless otherwise restricted (9903.01.88).
Informational materials, including books, films, photographs, CDs, and digital media (9903.01.89).
Special Rules for Chapter 98 Entries
Goods properly entered under Chapter 98 HTSUS provisions are not subject to the additional duty, except for those entered under:
9802.00.40 / .50 / .60 → duty applies to the value of processing done in India.
9802.00.80 → duty applies to the value of the article assembled abroad (less U.S. components).
Foreign Trade Zones (FTZ)
- Affected Indian-origin goods admitted to FTZs on or after August 27, 2025, must be entered under privileged foreign status (19 CFR 146.41), unless otherwise eligible under domestic status (19 CFR 146.43).
Upon entry for consumption, they will be subject to the 25% duty and other applicable tariffs.
Drawback Eligibility
Duty drawback will be available for the additional duties imposed under this measure.
Reporting Sequence on Entry Summaries
When filing entries, CBP requires HTS reporting in the following order:
Chapter 98 provision (if applicable).
Chapter 99 numbers for additional duties, in sequence:
Section 301 → IEEPA → Section 232 → Section 201 duties → Section 201 quota.
Chapter 99 numbers for replacement duties or other special provisions.
Chapter 99 numbers for other quota requirements.
Chapter 1–97 classification (commodity tariff).
See full CBP Guidance – CSMS # 66027027 – Guidance-Additional Duties on Imports from India
Federal Register Notice
The Federal Register notice Annex presents the modifications to subchapter III of Chapter 99 of the HTSUS in response to the 25% ad valorem duty on Indian products by inserting new headings in numerical sequence, with the material in the new heading inserted in the columns of the HTSUS labeled “Heading/Subheading”, “Article Description”, “Rates of Duty 1-General”, “Rates of Duty 1-Special” and “Rates of Duty 2”, respectively.
See full Federal Register Notice – Implementation of Additional Duties on Products of India Pursuant to the President’s Executive Order 14329, Addressing Threats to the United States by the Government of the Russian Federation.
Monitoring for Expansion to Other Countries and Definitions
The Executive Order authorizes an ongoing review of other countries potentially importing Russian oil:
The Secretary of Commerce, in coordination with the Secretaries of State and Treasury, will determine whether additional countries are importing Russian-origin oil.
If confirmed, the administration may impose a similar 25% tariff on imports from those countries.
The Secretary of State is also tasked with continuous monitoring of the national emergency and will recommend further action as needed.
Definitions
Russian Federation Oil: Includes crude oil or petroleum products extracted, refined, or exported from Russia, regardless of corporate or national ownership.
Indirectly Importing: Includes purchase of Russian oil via intermediaries or third countries, where the oil’s origin can reasonably be traced to Russia, as determined by the Secretary of Commerce in consultation with other agencies.
The imposition of a 25% tariff on Indian-origin goods represents a significant expansion of U.S. economic pressure on countries seen as indirectly supporting Russia’s war in Ukraine. With the ability to expand this tariff to other nations, and with no current expiration on the national emergency, the U.S. is signaling a long-term enforcement strategy. Businesses importing from India—and potentially other countries—will need to closely monitor developments and ensure compliance with the new requirements as global trade realigns around national security priorities.
How GHY Can Help?
GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.
By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.
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