Trump’s 50% India Tariff Puts US Retailers In A Tight Spot; Details Inside
“It is extremely unfortunate that the US has chosen to impose additional tariffs on India for actions that several other countries are also taking in their own national interest,” the ministry said
Leading American retail giants have reportedly suspended orders from Indian exporters following a sharp hike in US tariffs on Indian goods. The move comes after US President Donald Trump announced a steep 50 per cent tariff on imports from India, sending shockwaves through the textile and apparel industry.
Indian exporters have received official communication, in the form of letters and emails from US buyers asking them to halt all shipments until further instructions. Retailers have shown little willingness to shoulder the additional cost, instead asking Indian firms to absorb the financial impact entirely, according to sources cited by NDTV Profit.
Heavy Losses Loom For Exporters
Industry insiders estimate the new tariffs will push up export costs by 30 per cent to 35 per cent, and could cause a massive 40 per cent to 50 per cent drop in orders from the US. This would translate to a loss of approximately $4–5 billion in business.
The United States remains India’s largest export market for textiles and apparel, accounting for 28 per cent of the sector’s total outbound shipments, valued at $36.61 billion in the fiscal year ending March 2025. With Bangladesh and Vietnam subject to only 20 per cent tariffs, Indian exporters now fear losing their competitive edge.
Tariff Trigger: India’s Russian Oil Imports
President Trump’s executive order, signed Wednesday, cited India’s continued oil imports from Russia as justification for the punitive tariffs. “I determine that it is necessary and appropriate to impose an additional ad valorem duty on imports of articles of India, which is directly or indirectly importing Russian Federation oil,” Trump said in the order.
The first tranche of the tariff — 25 per cent — took effect on Thursday, with the second 25 per cent set to kick in on August 28.
India Hits Back: Calls Tariffs Unfair, Unjustified
India has condemned the tariffs, calling them “unfair, unjustified and unreasonable.” In a strongly worded statement, the Ministry of External Affairs said, “The United States has in recent days targeted India's oil imports from Russia. We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India.”
The government also pointed out the hypocrisy of the US and EU, stating that both continue to engage in extensive trade with Russia across multiple sectors — from nuclear fuel and electric vehicle components to LNG and chemicals.
“It is extremely unfortunate that the US has chosen to impose additional tariffs on India for actions that several other countries are also taking in their own national interest,” the ministry said.
India Reiterates Commitment To National Interest
India has defended its decision to purchase Russian oil, noting that the country began sourcing from Russia only after traditional suppliers shifted focus to European markets following the Ukraine war. “India’s imports are meant to ensure predictable and affordable energy costs to the Indian consumer,” the statement read, adding that such decisions were “a necessity compelled by global market situation.”
The statement also underscored that the US continues to import Russian uranium hexafluoride, palladium, fertilisers, and chemicals. Meanwhile, the EU's trade with Russia remains substantial, with Euro 67.5 billion in goods traded in 2024 and an additional Euro 17.2 billion in services the year before.
“In this background, the targeting of India is unjustified and unreasonable. Like any major economy, India will take all necessary measures to safeguard its national interests and economic security,” the Ministry concluded.
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