India Halts ₹31,500 Crore US Defence Deal Amid Tariff Dispute

August 8, 2025

New Delhi, Aug 8: Amid the tariff dispute, India has currently put a halt on the purchase of new weapons and aircraft from the US. News agency Reuters quoted two officials as saying that under the defense deal, there was a plan to buy P-8I Poseidon planes, Striker combat vehicles, entry missile tanks.

According to officials, Defence Minister Rajnath Singh was going to visit Washington for this deal, but his trip has been cancelled. This deal is said to be worth ₹31,500 crores. This decision of the central government is being linked to the tariff war.

50% tariff on India till now

Trump has so far announced a 50% tariff on India. He imposed a 25% tariff on July 30, which came into effect from August 7. At the same time, by signing an executive order on August 6, he has increased the tariff on India by another 25%, which will come into effect from August 27. Trump’s order states that this action has been taken against India because of the purchase of Russian oil. Russia is using this money in the war against Ukraine.

News agency Reuters reported that neither the Indian Defense Ministry nor the Pentagon has made any statement on this issue. However, some media reports are claiming that no decision has been taken so far to cancel the defense deal.

The move comes amid escalating trade tensions between the two nations, following the US decision to raise tariffs on Indian goods to a total of 50 per cent.