New Delhi: Starting today, Indian exporters face a steep challenge as the United States enforces fresh tariffs, doubling duties on a wide range of goods from India. With the new move, nearly two-thirds of India’s exports to the US will be subject to a 50% tariff, severely impacting competitiveness in the American market.

Tariffs Double Amid Tensions

A 25% duty imposed during the Trump administration is already in effect. An additional 25% levy, announced as retaliation for India’s continued purchases of Russian crude oil and military equipment, has now come into force. Together, these measures will cover goods worth around $60 billion, according to the Global Trade Research Initiative (GTRI).

Industries on Edge

Labour-intensive sectors such as textiles, gems and jewellery, carpets, shrimp, and furniture are expected to be the hardest hit. Small and medium enterprises, which rely heavily on exports, fear large-scale job losses.

Textile manufacturer Bhadresh Dodhia said exporters are working on razor-thin margins and cannot absorb the added costs. “It’s not sustainable for importers to take such a big hit. Ultimately, it’s consumers who will bear the burden,” he said.

Economic Dilemma for India

Former ICAI president Ved Jain highlighted India’s difficult choice: stop importing Russian oil and hurt domestic efficiency, or continue buying it and face retaliatory trade actions. “It’s a case of choosing the lesser of two evils,” he explained.

Blowback for the US

Economists warn that the tariff war may also hurt the American economy. SP Sharma noted that higher import costs could push inflation upward, hampering US growth. “I don’t see this benefiting the US economy. It may only lead to higher inflation and slower expansion,” he said.

Trade Outlook

India’s exports to the US, currently valued at $86.5 billion, are projected to shrink to about $49.6 billion by FY26. While 30% of goods will remain duty-free and 4% face a 25% duty, a significant 66%—covering major export categories—will now attract the 50% tariff.

This disruption is expected to benefit competing exporters such as China, Vietnam, Mexico, and Turkey, who are well-placed to capture India’s lost market share. With the US accounting for nearly 18% of India’s total goods exports, the impact on jobs, businesses, and growth could be severe.

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