Trump’s 50% tariffs on Indian goods over Russian oil purchases come into effect.

 NEW DELHI, AUGUST 28 – The U.S. has imposed steep tariffs on a range of Indian products, raising concerns about a major blow to India’s exports in its largest overseas market. President Donald Trump had initially set a 25% tariff, but an executive order earlier this month added another 25% because of India’s purchases of Russian oil, bringing the total U.S. tariffs to 50%.


The Indian government estimates these tariffs could affect $48.2 billion in exports. Officials warn that the duties may make exports to the U.S. unprofitable, potentially leading to job losses and slower economic growth.


India–U.S. trade has grown in recent years, but disputes over market access and domestic political pressures leave it vulnerable. Labor-intensive sectors such as textiles, gems and jewelry, leather goods, food, and automobiles are expected to be hit the hardest, according to the Global Trade Research Initiative.


“The new tariff regime is a strategic shock that could wipe out India’s long-standing presence in the U.S., causing unemployment in export-driven areas and weakening India’s role in global industrial value chains,” said Ajay Srivastava, founder of the think tank and a former Indian trade official.


Some sectors like pharmaceuticals and electronics have been exempted, offering partial relief for India.


Exporters fear losses

Puran Dawar, a leather footwear exporter in Agra, said the industry would take a big hit unless domestic demand or other overseas markets pick up. His clients include global retailer Zara. Dawar, also regional chairman of the Council for Leather Exports, warned that high tariffs will also affect U.S. consumers.


Groups representing exporters say small and medium enterprises, which rely heavily on the American market, will be particularly vulnerable. Ajay Sahai, director general of the Federation of Indian Export Organizations, said, “Some product lines will simply become unviable overnight.”


Modi vows not to yield

The tariffs come amid U.S. pressure for greater access to India’s agriculture and dairy markets. India and the U.S. have held five rounds of trade talks but have not reached an agreement, largely because India wants to protect jobs in these sectors.


Prime Minister Narendra Modi said his government will prioritize the interests of farmers, small businesses, and the dairy sector. “The world is witnessing a politics of economic selfishness,” he said at a rally in Gujarat. A U.S. delegation canceled plans for a sixth round of trade talks in New Delhi this week.


India plans reforms to cushion the impact

The government is working on reforms to boost local consumption and protect the economy. Changes to the goods and services tax (GST) are being considered to reduce costs for insurance, cars, and appliances ahead of Diwali in October.


Officials are also discussing financial incentives, including favorable bank loans for exporters, and exploring opportunities to expand exports to Latin America, Africa, and Southeast Asia. Renewed trade negotiations with the European Union could help reduce India’s dependence on the U.S. market.

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