Trump’s 50% Tariffs on Indian Goods Take Effect, Escalating U.S.-India Trade Tensions
U.S. President Donald Trump’s decision to double tariffs on Indian goods to as high as 50% officially took effect on Wednesday, intensifying trade tensions between the world’s two largest democracies. The move combines a punitive 25% duty tied to India’s imports of Russian oil with an earlier 25% tariff on a wide range of products, raising overall rates to levels among the highest in the world.
The steep duties now cover Indian exports such as garments, gems and jewellery, footwear, furniture, sporting goods, and chemicals—placing India alongside China and Brazil in facing some of Washington’s toughest trade measures. Analysts warn the tariff hike could affect more than half of India’s $87 billion merchandise exports to the U.S., potentially shifting business to competitors like Vietnam, Bangladesh and China.
The Indian government expressed concern over the impact on thousands of small exporters and jobs, particularly in Gujarat, Prime Minister Narendra Modi’s home state. Commerce Ministry officials announced plans to provide financial aid to affected businesses while encouraging diversification into alternative markets including China, Latin America and the Middle East.
A U.S. Customs and Border Protection notice granted temporary relief for Indian goods already in transit before the deadline, allowing those shipments to enter under previous tariff rates until September 17. Other duties on steel, aluminium, vehicles, copper and similar products under Section 232 national security rules remain unchanged.
The tariff escalation follows five unsuccessful negotiation rounds, where India had sought a cap of 15% similar to rates for Japan, South Korea and the EU. White House trade adviser Peter Navarro confirmed that Washington would not compromise on the 50% rate. Despite reaffirming their broader strategic cooperation through the Quad alliance and defence ties, both nations now face growing economic friction as bilateral trade—valued at $129 billion in 2024 with a $45.8 billion U.S. deficit—comes under strain.
Source: Business day