Indian exporters are bracing for a sharp decline in orders to the United States after trade talks collapsed and Washington confirmed steep new tariffs on the South Asian nation’s goods, taking effect from Wednesday, Reuters reports.
“Exporter groups estimate hikes could affect nearly 55% of India’s merchandise exports worth $87 bn to the United States, while benefiting competitors such as Bangladesh, China and Vietnam.”
According to Reuters, the additional 25 per cent duty, announced by President Donald Trump and confirmed in a notice by the Homeland Security Department, brings total tariffs on some Indian products to as much as 50 per cent, among Washington’s highest. The move is seen as retaliation for India’s increased purchases of Russian oil.
“The government has no hope for any immediate relief or delay in U.S. tariffs,” said a commerce ministry official, who spoke on condition of anonymity due to lack of authorisation.
The official added that exporters affected by the tariffs would receive financial assistance and be encouraged to diversify to alternative markets such as China, Latin America, and the Middle East.
Exporter groups estimate the tariff hikes could affect nearly 55 per cent of India’s merchandise exports to the United States, worth $87 bn, while potentially benefiting competitors such as Bangladesh, China, and Vietnam.
Wednesday’s duties will apply from 12:01 a.m. EDT (9:31 a.m. IST), with exceptions for shipments in transit, humanitarian aid, and items under reciprocal trade programmes.
The Indian rupee fell to a three-week closing low of 87.68 against the dollar despite suspected central bank intervention. The benchmark NSE and BSE indexes closed down one per cent each, marking their worst session in three months.
U.S. trade adviser Peter Navarro and Treasury Secretary Scott Bessent have accused India of indirectly funding Russia’s war in Ukraine by increasing oil purchases. Bessent said earlier this month that India was profiteering from its sharply increased imports, making up 42 per cent of total oil purchases compared with less than one per cent before the war, a shift Washington called unacceptable.
India has issued no directive yet on Russian oil purchases, with companies continuing to buy based on economics, according to three refining sources.
