Indian exports to the US now face a 50% tariff, as Washington imposes an additional 25% duty starting Wednesday. The move, announced by the US Department of Homeland Security, penalizes India’s purchase of Russian crude oil, which surged to 1.8 million barrels per day in 2024, worth about $49 billion.
Key Highlights
- U.S. enacts steep 50% tariffs on Indian exports, sharply hurting textiles, gems, shrimp, and leather.
- Exports may fall drastically, with textile and jewelry firms facing order cancellations and squeezed profit margins.
The hike will disproportionately hurt labour-intensive sectors such as textiles, gems and jewellery, carpets and seafood. Federation of Indian Export Organisations (FIEO) president S.C. Ralhan warned that 55% of India’s shipments to the US—worth $47–48 billion—now face pricing disadvantages of up to 35%, undermining competitiveness against rivals in Vietnam, Bangladesh, and China.
The Sensex fell 849 points (1.04%) and the Nifty dropped 255 points (1.02%) following the tariff confirmation. Trade experts estimate India’s exports to the US may shrink 43% to $49.6 billion, with GDP growth potentially hit by 100 basis points this fiscal.
Also Read: India Receives US Notice Before Donald Trump's 50% Tariff Deadline
Despite five failed negotiation rounds since February, India’s Commerce Ministry is weighing financial support for affected exporters and exploring market diversification. The sixth round of trade talks, scheduled for August 25, was postponed by the US amid rising tensions.
