From Partnership to Penalty: US Tariffs Shadow India Trade Deal
The promise of deeper economic cooperation is undermined by punitive measures that could torpedo the India-U.S. pact even before it is signed.
The India-U.S. trade agreement is nearly finalized, with U.S. Ambassador to India Sergio Gor expressing confidence in its completion. However, recent U.S. actions may jeopardize the deal. The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, passed by the Senate, proposes steep tariffs on goods imported from Russia, including a 500 percent tariff, which could penalize India as one of the top importers of Russian crude oil.
Additionally, Trump's proposal to tax generic medicines at 100 percent beginning in 2028, unless companies bring production back to the U.S., threatens India's pharmaceutical sector. India is the largest market for U.S. generic pharmaceuticals, with two key companies heavily reliant on the U.S. market. Indian pharmaceutical firms have pledged to invest $19.1 billion to increase capacity in the U.S., but the ultimate impact on domestic production and global medicine availability remains uncertain.
Written by urgent.news from The Diplomat's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
