U.S. imposes 50% tariffs on Indian goods, hitting exporters

The U.S. has doubled tariffs on Indian goods to 50%, heightening trade tensions with one of its closest strategic partners and threatening thousands of exporters and jobs in India.

This follows an existing 25% tariff imposed over India’s purchases of Russian oil, bringing total duties to among the highest the U.S. has levied, comparable to rates for Brazil and China.

The new tariffs could affect thousands of small exporters, especially in Prime Minister Narendra Modi’s home state of Gujarat.

An anonymous Indian Commerce Ministry official said exporters would receive financial assistance and be encouraged to explore markets in China, Latin America, and the Middle East.

U.S. Customs and Border Protection allowed a three-week exemption for goods already in transit, permitting them to enter at lower rates before 17 September. Products such as steel, aluminium, passenger vehicles, and copper remain subject to separate Section 232 tariffs of up to 50%.

The tariffs follow five rounds of unsuccessful negotiations, during which India had hoped U.S. duties would be capped at 15%, similar to other major trade partners.

Both sides attributed the breakdown to political misjudgments and missed signals. Bilateral trade between the two economies totaled $129 billion in 2024, with a $45.8 billion U.S. trade deficit.

Experts estimate nearly 55% of India’s $87 billion in exports to the U.S. could be affected, potentially benefiting competitors like Vietnam, Bangladesh, and China.

Sustained high tariffs may also undermine India’s appeal as an alternative manufacturing hub to China for electronics and smartphones.

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