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US President Donald Trump on Wednesday slapped a further 25 per cent tariff, elevating the whole duties to 50 per cent on items coming from India, as a penalty for New Delhi’s continued buy of Russian oil.
The USA has imposed extra tariffs or penalties for Russian imports solely on India, whereas different patrons resembling China and Turkey, have to this point escaped such measures.
“The tariffs are anticipated to make Indian items far costlier within the US, with potential to chop US-bound exports by 40–50 per cent,” assume tank GTRI mentioned.
After the brand new tariff, it mentioned, natural chemical substances’ exports to the US will entice a further 54 per cent responsibility. The opposite sectors which is able to entice excessive duties embody carpets (52.9 per cent), attire – knitted (63.9 per cent), attire – woven (60.3 per cent), textiles, made-ups (59 per cent), diamonds, gold and merchandise (52.1 per cent), equipment and mechanical home equipment (51.3 per cent), furnishings, bedding, mattresses (52.3 per cent).
The 25 per cent responsibility, introduced on July 31, will come into drive from August 7 (9.30 am IST).
The extra 25 per cent might be applied by the US from August 27. These might be over and above the prevailing customary import responsibility within the US.
In 2024-25, the bilateral commerce between India and the US stood at USD 131.8 billion (USD 86.5 billion exports and USD 45.3 billion imports).
The sectors, which might bear the brunt of fifty per cent responsibility embody textiles/ clothes (10.3 billion), gems and jewelry (12 billion), shrimp (USD 2.24 billion), leather-based and footwear (USD 1.18 billion), chemical substances (2.34 billion), and electrical and mechanical equipment (about USD 9 billion).
Kolkata-based seafood exporter and MD of Megaa Moda, Yogesh Gupta mentioned that now India’s shrimp will grow to be costly within the US market.
“We’re already going through big competitors from Ecuador because it has solely 15 per cent tariff. Indian shrimp already attracts a 2.49 per cent anti-dumping responsibility and a 5.77 per cent countervailing responsibility. After this 25 per cent, the responsibility might be 33.26 per cent from August 7,” Gupta mentioned.
The Confederation of Indian Textile Business (CITI) mentioned that it’s “deeply involved” in regards to the potential antagonistic affect of the efficient 50 per cent US tariff price for India.
The US is India’s largest marketplace for textile and attire exports..
“The US tariff announcement of August 6 is a large setback for India’s textile and attire exporters because it has additional sophisticated the difficult state of affairs we have been already grappling with and can considerably weaken our potential to compete successfully vis–vis many different international locations for a bigger share of the US market,” it mentioned.
It urged the federal government to urgently take steps to assist the sector throughout these massively testing occasions.
Colin Shah, MD, Kama Jewellery, mentioned this transfer is a extreme setback for Indian exports, with practically 55 per cent of India’s shipments to the US market instantly affected.
The 50 per cent reciprocal tariff successfully imposes a price burden, putting our exporters at a 30–35 per cent aggressive drawback in comparison with friends from international locations with lesser reciprocal tariff, he mentioned.
“Many export orders have already been placed on maintain as patrons reassess sourcing selections in mild of upper landed prices. For numerous MSME-led sectors, absorbing this sudden value escalation is solely not viable. Margins are already skinny, and this extra blow may drive exporters to lose long-standing shoppers,” Shah mentioned.
Kanpur-based Growmore Worldwide Ltd MD Yadvendra Singh Sachan mentioned the exporters ought to search for new markets to take care of export development.
Exporters are hoping that early finalisation of the India-US bilateral commerce settlement will assist in coping with the tariff challenges.
The negotiations between India and the US are nonetheless occurring for an interim commerce deal, although there might be no compromise on the purple strains with regard to responsibility concessions on agriculture gadgets, dairy, and genetically modified (GM) merchandise, sources mentioned.
The 2 international locations are negotiating a bilateral commerce settlement (BTA). They’re aiming to conclude the primary section of the pact by fall (October-November) this 12 months.
– Ends
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