US Imposes Additional 25% Tariff on Indian Goods, Exports Likely to Suffer

The United States has officially announced an additional 25% tariff on goods imported from India. According to Tuesday’s order, the new duty will come into effect from Wednesday (August 27) at 9:31 AM Indian Standard Time.

US President Donald Trump had earlier, on August 6, declared this tariff as a penalty for India’s oil imports from Russia. Later, on August 7, he cited the trade deficit with India as another reason for imposing a 25% duty. With the latest move, the total tariff on Indian exports to the US will now rise to as high as 50%.

The order specifies that the listed items will be subject to the tariff, whether brought directly for consumption in the US or released from bonded warehouses.

Experts warn that the decision will hit several industries, particularly jewelry, textiles, automobiles, and seafood, reducing their profit margins. Without a trade deal or tariff concessions from Washington, nearly USD 4.8 billion worth of Indian exports could be directly impacted.

However, the IT, pharmaceutical, and electronics sectors remain exempt. Electronics currently fall under Section 232 exemptions, meaning smartphones from companies like Apple and Samsung will not be affected. Pharmaceuticals also enjoy a 0% tariff at present, though Trump has threatened to raise it to 150% and later 250% within 18 months. IT services, being part of the service sector, are also outside the scope of the 50% tariff.

According to NBC, India’s top exports to the US include jewelry, textiles, machinery, and chemicals. The higher tariffs will make these goods more expensive in the US, likely reducing demand. As a result, Indian manufacturers may be forced to cut production, potentially leading to layoffs. Analysts caution, however, that it is still difficult to estimate how many jobs may be lost across different sectors.