The tariffs apply to merchandise “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am EDT on August 27, 2025” (9:31 am IST), in response to the Division of Homeland Safety.
The transfer is linked to India's continued purchases of Russian oil and defence gear. White Home commerce adviser Peter Navarro and US Treasury Secretary Scott Bessent have accused India of not directly funding Russia's battle in Ukraine by means of its oil imports. Bessent famous earlier this month that India now sources 42% of its oil from Russia, up from below 1% earlier than the battle.
“The federal government has no hope for any instant aid or delay in US tariffs,” a Commerce Ministry official informed Reuters on situation of anonymity. He added that exporters affected by the tariffs will obtain monetary help and assist to diversify into markets corresponding to China, Latin America, and the Center East.
Additionally Learn: Trump's 50% tariff shock hits India – what it means for development, jobs, and hardest-hit sectors
“The federal government has recognized almost 50 nations for growing Indian exports, significantly of textiles, food-processed objects, leather-based items, and marine merchandise,” the official mentioned.Prime Minister Narendra Modi, talking in Ahmedabad, described the present international commerce local weather as one outlined by “financial selfishness,” the place nations prioritise their very own pursuits. He emphasised India's resilience, saying, “Regardless of how excessive the stress, India will proceed to construct its power to resist it.”Modi underscored India's dedication to safeguard home pursuits. “The pursuits of farmers, cattle rearers, and small-scale industries are paramount. The stress might enhance, however we'll bear it,” he mentioned, invoking the legacies of Lord Krishna and Mahatma Gandhi.
Exports below menace
As per GTRI, India exports round $86.5 billion in items to the US every year. Of this, roughly $60.2 billion, about two-thirds, will now face a 50% tariff. A further $3.4 billion in auto components stays on the present 25% obligation, whereas $27.6 billion, primarily in prescription drugs, electronics, and petroleum, is exempt, in response to the International Commerce Analysis Initiative (GTRI).
Labour-intensive sectors corresponding to textiles, attire, gems and jewelry, seafood, and leather-based are most uncovered. Metals, together with aluminium, metal, and copper, proceed below the prevailing 25% obligation.
Ajay Srivastava, founding father of GTRI, warns that exports within the affected sectors may collapse by 70%, falling from $60.2 billion to $18.6 billion. General shipments to the US may decline by 43%, placing a whole lot of hundreds of jobs in India's export hubs in danger.
Economists estimate the tariffs may shave 0.4–0.5% off GDP development in FY26, with results felt on personal funding, labour markets, and home manufacturing.
Additionally Learn: Centre readies export protect as US tariffs set to hit $48 bn commerce
Overseas Minister S. Jaishankar mentioned final week that commerce talks proceed, highlighting that US scrutiny of India's Russian oil imports isn't utilized equally to China or the EU. Reuters reported that three refining sources confirmed firms will proceed shopping for Russian oil based mostly on economics, regardless of the tariffs.
“There isn't a directive from the federal government thus far relating to oil purchases from Russia,” Jaishankar mentioned. He added that India will proceed to make strategic vitality decisions, dismissing claims that the tariff is solely an “oil dispute.”
Earlier this 12 months, Indian officers have been assured a take care of the US may restrict tariffs to fifteen%, however negotiations broke down amid political misjudgments and missed indicators. Bilateral commerce between the US and India totals over $190 billion.
How India is making ready for Trump's tariffs
The Centre has dominated out retaliation however is engaged on measures to melt the blow. Officers mentioned conferences with business are ongoing, and a ₹25,000-crore Export Promotion Mission is into consideration. The plan consists of commerce finance, regulatory assist, requirements alignment, ecommerce hubs, warehousing, and higher branding for “Model India.”
“The Export Promotion Mission and different proposals corresponding to SEZ amendments are being thought-about,” mentioned a senior official. One other official added, “Deliberations within the authorities have been ongoing and conferences with the business are additionally happening.”
India and the US are negotiating a bilateral commerce settlement (BTA). Nevertheless, American negotiators have postponed their India go to that was scheduled for August 25.
Commerce and business minister Piyush Goyal, on the ET World Leaders Discussion board final week, mentioned India's relationship with the US is “very consequential,” however nationwide curiosity stays the guiding issue. “We're a GST revamp. We'll see how we are able to assist many of those labour-intensive sectors, like meals processing, textile, by means of the GST framework to enhance home demand,” he mentioned.
Wanting forward
The federal government is contemplating GST changes, reforms, and incentives to cushion the affect. Bilateral commerce discussions might supply some aid, however for now, Indian exporters face one of many harshest commerce limitations in current reminiscence.
“It is a important shock to India's export-led development,” mentioned Ajay Srivastava, founding father of GTRI. “The subsequent few months will take a look at the resilience of our industries, our workforce, and our commerce diplomacy.”
