The economic landscape between the United States and India is undergoing a significant shift, marked by new trade barriers and strategic business maneuvers. Here's a breakdown of the key developments:

Trump Imposes 25% Tariff on India

Former US President Donald Trump has announced the imposition of a 25% tariff on goods imported from India, effective August 1, 2025. This decision is coupled with an additional, unspecified "penalty". Trump stated that the tariff and penalty are due to India's continued purchase of oil and military equipment from Russia despite the ongoing war in Ukraine. He has criticized India's trade policies, citing a "massive" trade deficit and "far too high" tariffs on US goods. According to Trump, India's trade practices are among the most "strenuous and obnoxious" globally.

In 2024, the US trade in goods with India was approximately $129.2 billion, making India the US's 10th largest trading partner. The US goods trade deficit with India was valued at $45.7 billion. This move comes after Trump previously hinted at imposing tariffs and follows a period of trade negotiations between the two countries.

Tata Motors' $4.5 Billion Iveco Buyout

In a major strategic move, Tata Motors is reportedly preparing to acquire Iveco, an Italian truck manufacturer, from the Agnelli family for $4.5 billion. If finalized, this would be the second-largest acquisition for the Tata Group, following its $12.9 billion purchase of Corus in 2007. It would also be the most significant transaction for Tata Motors, surpassing its $2.3 billion acquisition of Jaguar Land Rover (JLR) in 2008.

The acquisition of Iveco would provide Tata Motors with access to the European truck and bus market, which is increasingly focused on electrification and hydrogen-powered vehicles. Iveco also brings valuable technological assets. Tata Motors is already a dominant player in India's commercial vehicle market with a growing presence in Asia, Africa, and Latin America; however, its European footprint has been modest.

Following reports of the potential acquisition, Tata Motors' shares experienced a decline. Despite near-term pressures, analysts remain cautiously optimistic about Tata Motors, with one brokerage firm maintaining an "Accumulate" rating on the stock and suggesting an upside potential of 16%.

Two Sharp with ET

In other news, "Two Sharp with ET" reported that the Enforcement Directorate (ED) has launched raids on Anil Ambani group companies in connection with a ₹3,000 crore loan fraud case involving Yes Bank. Additionally, Morgan Stanley projects that India will become the world's third-largest economy by 2028, with five states expected to cross the $1 trillion mark by 2035.