US President Donald Trump on Wednesday issued an executive order imposing an additional 25% tariff on Indian goods, citing New Delhi’s continued imports of Russian oil, sharply escalating tensions between the two countries after trade talks collapsed.

The move is expected to hit key Indian export sectors, including textiles, footwear, and gems and jewellery and marks the most serious downturn in US-India relations since Trump returned to office in January.

The tariff is effective August 27, the White House said.

US President had announced a ‘substantial’ rise in tariffs for India earlier on Monday, criticising India for fuelling the “Russian War Machine” to kill people in Ukraine.

He had announced to impose a 25% tariff on goods imported from India last week.

Trump also hinted at a possible “penalty” for the world’s fifth-largest economy over the continuation of trade ties with Russia amid war in Ukraine.

Trump’s decision follows five rounds of inconclusive trade negotiations, which stalled over U.S. demands for greater access to Indian agriculture and dairy markets.

India’s refusal to curb Russian oil purchases — which surged to a record $52 billion last year — ultimately triggered the tariff escalation.

India says extra tariffs ‘extremely unfortunate’

“India will take all actions necessary to protect its national interests,” India’s external affairs ministry said in a statement, saying it was “extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest.”