U.S. President Donald Trump’s decision to double tariffs on Indian imports to as much as 50% took effect on Wednesday, intensifying trade tensions between the world’s two largest democracies.
The move combines a punitive 25% levy linked to India’s purchases of Russian oil with an earlier 25% tariff on Indian goods, bringing total duties to levels comparable with those imposed on Brazil and China.
The new tariffs target a wide range of exports, including garments, gems and jewelry, footwear, sporting goods, furniture, and chemicals—sectors that support thousands of small exporters in India.
Analysts warn that the policy could disproportionately affect jobs in Prime Minister Narendra Modi’s home state of Gujarat, a hub for textiles and jewelry production.
India’s Commerce Ministry has yet to issue a formal response, but a senior official speaking on condition of anonymity confirmed that exporters would be offered financial support.
Authorities also plan to encourage businesses to diversify into alternative markets such as China, Latin America, and the Middle East to soften the blow from U.S. trade restrictions.
According to a U.S. Customs and Border Protection notice, Indian goods already loaded onto vessels before the midnight deadline will be granted a three-week exemption.
These shipments may enter the United States under the old tariff rates if they arrive before September 17, providing temporary relief to exporters racing against the deadline.
Notably, certain sectors remain exempt from the new tariff regime, including steel, aluminum, derivative products, passenger vehicles, copper, and other items already subject to separate duties of up to 50% under the Section 232 national security trade law. This carve-out ensures that critical industrial inputs and auto-related goods are not immediately swept into the widening tariff dispute.
The tariff escalation follows five rounds of failed negotiations between Washington and New Delhi. Indian officials had pushed for a cap of 15%—a rate already extended to other U.S. trade partners like Japan, South Korea, and the European Union—but talks collapsed amid political misjudgment and missed signals.
Trade data underscores the scale of the dispute: U.S.-India goods trade totaled $129 billion in 2024, with Washington running a $45.8 billion deficit, according to U.S. Census Bureau figures. While India applies an average tariff of 7.5% on U.S. imports, Washington has long criticized higher Indian rates on specific categories, including up to 100% on autos and 39% on farm goods.
White House trade adviser Peter Navarro dismissed prospects of last-minute concessions, confirming the tariffs would proceed without delay.
