Donald Trump’s 50% Tariffs on Indian Exports Effective Today: $48.2 Bn Trade at Risk amid US-India Talks
President Trump has defended the escalation of tariffs on India as a strategy to pressure Russia into acceding to the US’ requirements in negotiations over Ukraine
US President Donald Trump has doubled down on his intent to increase tariffs levied on goods exported from India, with a ginormous 50% tariff being effective from today onwards.
India faces the steepest tariff action yet from Washington as US President Donald Trump’s 50% duties on Indian exports took effect this morning at 9:30 am IST. The executive order 14329, which was issued by the US Department of Homeland Security under an executive directive signed by Trump on August 6, doubles the earlier 25% levy imposed on Indian goods from August 7. Officials confirmed that the duties apply to products “entered for consumption” from 12:01 am EDT on August 27.
Access the Full Document of the US President’s Executive Order 14329 of August 6, 2025 Here
President Trump has defended the escalation of tariffs on India as a strategy to pressure Russia into acceding to the US’ requirements in negotiations over Ukraine, while also being highly vocal of India’s “high tariffs and barriers”. The current move comes at the heels of the five rounds of inconclusive bilateral talks that were conducted between India and the US between March and July, after which Washington turned to unilateral action.
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Impact on Trade and Key Sectors
The new duties have been estimated to have a lasting effect on the $48.2 billion worth of Indian merchandise bound for the US. The US is India’s largest export market with shipment values rising up to $86 billion in FY25.
According to industry groups, nearly 55-66% of India’s exports to America shall be covered under the goods affected by the increased tariffs - with textiles, shrimp, leather and gems and jewellery set to take the hardest hit.
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Reports suggest that production stoppages are already underway in textile hubs such as Tiruppur, Noida and Surat, while the seafood industry faces supply chain disruptions since the US accounts for about 40% of India’s shrimp exports.
Analysts warn the levies could drive exports down by 20-30% and hand a competitive edge to similar goods’ exporters such as Vietnam, Bangladesh, Mexico and China. American economic research entity Moody’s Analytics cautioned that exporters may be forced to slash prices, reduce margins and investment to keep their heads above water during the latest tariff imposition. Pharmaceuticals, electronics and petroleum products remain exempt from the duties.
India’s Response and Trade Talks
Prime Minister Narendra Modi has rejected Washington’s “self-centred economic policies” and urged Indians to buy swadeshi goods, pledging to protect farmers, small industries and domestic producers. “Pressure on us may increase, but we will bear it all,” Modi said during an event at Ahmedabad. He reaffirmed India’s right to purchase oil from Russia, emphasising energy security as paramount.
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Commerce and Industry Minister Piyush Goyal confirmed that no retaliatory tariffs are planned but said policy measures are being prepared. A ₹25,000 crore Export Promotion Mission has been announced to support exporters through trade finance, regulatory reform and market access.
The bilateral trade issues come as India reportedly prepares to conduct a complete restructuring of the Goods and Services Tax (GST) regime, with plausible proposals to reduce tax rates on food and textile products to stimulate domestic demand. Officials also highlighted efforts to diversify trade through free trade agreements with other major economies and to expand homegrown initiatives.
The Reserve Bank of India has pledged support to the cause, with Governor Sanjay Malhotra noting that local currency trade agreements with countries such as UAE, Mauritius and Indonesia would help shield the economy from volatility within the exchange markets. A US delegation visit to India on August 25 was scheduled but was later postponed.
Despite the tariff escalation, both sides continue to try and mitigate the situation owing to the immense trade relations and political trajectory being followed by the heads of State.
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