India faces a major challenge as steep U.S. tariffs on Indian products take effect. The import duties coming into force threaten over half of India’s exports to its largest overseas market.
Steep U.S. tariffs on a range of Indian products took effect Wednesday, threatening a serious blow to India’s overseas trade in its largest export market.
President Donald Trump had initially announced a 25% tariff on Indian goods. But earlier this month he signed an executive order imposing an additional 25% tariff due to India’s purchases of Russian oil, bringing the combined tariffs imposed by the U.S. on its ally to 50%.
The Indian government estimates the tariffs will impact $48.2 billion worth of exports. Officials have warned the new duties could make shipments to the U.S. commercially unviable, triggering job losses and slower economic growth.
India–U.S. trade relations have expanded in recent years but remain vulnerable to disputes over market access and domestic political pressures. India is one of the fastest-growing major global economies and it may face a slowdown as a result.
Estimates by New Delhi-based think tank Global Trade Research Initiative suggest labor-intensive sectors such as textiles, gems and jewelry, leather goods, food and automobiles will be hit hardest.
“The new tariff regime is a strategic shock that threatens to wipe out India’s long-established presence in the U.S., causing unemployment in export-driven hubs and weakening its role in the industrial value chain,” said Ajay Srivastava, the think tank’s founder and a former Indian trade official.
