By RAJESH ROY, Related Press
NEW DELHI (AP) — Steep U.S. tariffs on a variety of Indian merchandise took impact Wednesday, threatening a severe blow to India’s abroad commerce in its largest export market.
President Donald Trump had initially introduced a 25% tariff on Indian items. However earlier this month he signed an govt order imposing a further 25% tariff resulting from India’s purchases of Russian oil, bringing the mixed tariffs imposed by the U.S. on its ally to 50%.
The Indian authorities estimates the tariffs will affect $48.2 billion price of exports. Officers have warned the brand new duties may make shipments to the U.S. commercially unviable, triggering job losses and slower financial development.
Employees at a producing unit make leather-based footwear in Agra, India, Monday, Aug. 25, 2025. (AP Photograph/Manish Swarup)
India–U.S. commerce relations have expanded lately however stay susceptible to disputes over market entry and home political pressures. India is likely one of the fastest-growing main international economies and it might face a slowdown in consequence.
Sectors to be impacted by US tariffs
Estimates by New Delhi-based assume tank International Commerce Analysis Initiative counsel labor-intensive sectors resembling textiles, gems and jewellery, leather-based items, meals and vehicles will probably 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,” stated Ajay Srivastava, the assume tank’s founder and a former Indian commerce official.
The U.S. has for now exempted some sectors resembling prescription drugs and digital items from extra tariffs, bringing some aid for India as its publicity in these sectors is critical.
Exporters concern losses
Puran Dawar, a leather-based footwear exporter in northern India’s Agra metropolis, says the business would take a considerable hit within the close to time period until home demand strengthens and different abroad markets purchase extra Indian items.
Puran Dawar, Chairman, Dawar group, ań exporter of leather-based footwear talks to The Related Press, in Agra, India, Monday, Aug. 25, 2025. (AP Photograph/Manish Swarup)
“This is an absolute shock,” stated Dawar, whose enterprise with the U.S. has grown lately. Dawar’s shoppers embrace the most important vogue retailer Zara.
Dawar, who can also be the regional chairman of the Council for Leather-based Exports — an export promotion physique — stated the U.S. ought to perceive that the steep tariffs will damage its personal shoppers.
Teams representing exporters warn that new import tariffs may damage India’s small and medium enterprises which might be closely reliant on the American market.
“It’s a tricky situation. Some product lines will simply become unviable overnight,” stated Ajay Sahai, director common of the Federation of Indian Export Organizations.
Modi vows to not yield to US strain
The tariffs come because the U.S. administration continues to push for higher entry to India’s agriculture and dairy sectors.
India and the U.S. have held 5 rounds of negotiations for a bilateral commerce settlement, however have but to succeed in a deal. That’s largely as a result of New Delhi has resisted opening these sectors to cheaper American imports, citing issues that doing so would endanger the roles of tens of millions of Indians.
Prime Minister Narendra Modi has vowed to not yield to the strain.
“For me, the interests of farmers, small businesses and dairy are topmost. My government will ensure they aren’t impacted,” Modi stated at a rally this week in his house state of Gujarat.
Modi stated the world was witnessing a “politics of economic selfishness.”
A U.S. delegation canceled plans to go to New Delhi this week for a sixth spherical of commerce talks.
India plans native reforms to cushion the blow from tariffs
The Indian authorities has begun engaged on reforms to spice up native consumption and insulate the financial system.
It has moved to alter the products and providers tax, or consumption tax, to decrease prices for insurance coverage, automobiles and home equipment forward of the most important Hindu pageant of Diwali in October.
The federal government council will meet early subsequent month to determine whether or not to chop taxes.
The Commerce Ministry and Finance Ministry are discussing monetary incentives that would come with favorable financial institution mortgage charges for exporters.
The Commerce Ministry can also be weighing steps to broaden exports to different areas, significantly Latin America, Africa and Southeast Asia. Commerce negotiations underway with the European Union may acquire renewed urgency as India works to cut back its dependence on the U.S. market.
Related Press video journalist Rishi Lekhi contributed to this report.
