Indian exporters are preparing for a major setback as Washington moves ahead with steep trade duties on Indian-origin goods, escalating tensions between the two countries.
The additional 25 per cent tariff, announced earlier this month by US President Donald Trump, will take effect from Wednesday, effectively doubling the existing levy to 50 per cent on several items – one of the harshest measures imposed by the US in recent years.
According to a US Homeland Security notification, the higher duties will apply to products entering the country for consumption or withdrawn from a warehouse for consumption from 12:01 AM EDT (9:31 PM IST) on August 27.
Exemptions will apply to in-transit shipments with proper certification, humanitarian aid, and goods covered under reciprocal trade programmes.
The action, the notification reiterated, comes as a response to India’s increased imports of Russian oil, which Washington argues indirectly supports Moscow’s military campaign in Ukraine.
Rupee Under Pressure as Trade Worries Mount
The development rattled currency markets on Tuesday, with the Indian rupee depreciating 22 paise to touch 87.78 against the US dollar, even as the greenback slipped against other major currencies globally.
India’s Commerce Ministry is yet to issue an official statement on the new tariff regime. However, a senior official indicated that the government sees little scope for immediate reprieve, reported Reuters.
“The government has no hope for any immediate relief or delay in US tariffs,” the news agency said citing the anonymous official. “Exporters hit by tariffs would be provided financial assistance and encouraged to diversify to alternative markets including China, Latin America and the Middle East. The government has identified nearly 50 countries for increasing Indian exports, particularly of textiles, food processed items, leather goods, marine products.”
Government Balancing Trade and Diplomacy
Prime Minister Narendra Modi has reiterated that the government will prioritise domestic interests despite the looming economic cost. At the same time, diplomatic moves are underway to ease broader geopolitical strains. Modi is scheduled to make his first visit to China in seven years at the end of the month, a step seen as part of efforts to rebalance India’s strategic position amid shifting global trade alignments.
