In a sweeping move that threatens to upend India’s export economy, U.S. President Donald Trump has announced 50% tariffs on $60.2 billion worth of Indian goods, effective August 27. The decision impacts 66% of India’s total exports to the U.S., including key sectors such as textiles, gems & jewellery, shrimp, carpets, and furniture, according to the Global Trade Research Initiative (GTRI).
The tariffs stem from Washington’s escalating trade penalties linked to India’s continued oil imports from Russia, and follow an earlier 25% duty imposed last month. The new directive, issued by the Department of Homeland Security, applies to goods “entered for consumption” after 12:01 am EDT on August 27.
GTRI projects a 70% drop in export volumes from affected sectors, potentially slashing India’s U.S.-bound trade from $86.5 billion in FY2025 to $49.6 billion in FY2026. The fallout could lead to massive job losses in labour-intensive industries and a 0.9 percentage point dip in India’s GDP growth, dragging it from a projected 6.5% to 5.6%.
Meanwhile, China, Vietnam, Mexico, and Turkey are expected to capitalize on India’s setback, gaining market share in U.S. sectors where Indian goods will now be less competitive.
India’s Ministry of External Affairs has condemned the move as “unfair and unjustified,” vowing to take all necessary steps to protect national interests.
(source ndtv.com)
—Agencies
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