Tariff War Escalates As Trump's Fresh Tariffs Kick In, India Now Faces 50% Duty

The additional 25 per cent levy, linked to India’s continued imports of Russian crude, is stacked on top of an earlier 25 per cent tariff imposed on multiple Indian exports.

As a result, goods such as garments, gems and jewellery, footwear, sporting equipment, furniture and chemicals now face some of the steepest US import duties.

Source : Freepik

US President Donald Trump’s decision to double tariffs on Indian goods, pushing rates up to 50 per cent, came into force today morning, marking a sharp escalation in trade friction between the two countries. The move, which impacts a wide range of products, places India among the hardest-hit US trade partners alongside Brazil and China.

The additional 25 per cent levy, linked to India’s continued imports of Russian crude, is stacked on top of an earlier 25 per cent tariff imposed on multiple Indian exports. As a result, goods such as garments, gems and jewellery, footwear, sporting equipment, furniture and chemicals now face some of the steepest US import duties.

Relief Window and Exemptions

A notice from the US Customs and Border Protection offers limited reprieve for Indian shippers. Goods already loaded on vessels before the deadline can enter at previous rates until 12:01 AM EDT (9:31 AM IST) on September 17. Steel, aluminium, passenger vehicles, copper and other products facing separate tariffs under Section 232 remain exempt from this latest increase, reported Reuters.

Citing an Indian Commerce Ministry official, the news agency stated the government would provide financial support to affected exporters and promote diversification into markets across China, Latin America and the Middle East. Exporters warn the decision could disrupt thousands of jobs.

Failed Negotiations and Rising Costs

The tariff increase follows five unsuccessful rounds of negotiations. Indian negotiators had hoped for a compromise that capped US tariffs at 15 per cent, similar to rates applied to partners like Japan, South Korea and the European Union. However, White House trade adviser Peter Navarro confirmed the new duties would take effect as scheduled, offering no indication of further talks.

The breakdown underscores deep miscalculations on both sides. In 2024, two-way goods trade between the US and India stood at $129 billion, with Washington recording a $45.8 billion trade deficit, US Census Bureau data shows. Exporter groups estimate that nearly 55 per cent of India’s $87 billion merchandise exports to the US could be affected, potentially benefiting rivals such as Vietnam, Bangladesh and China.

Strategic Ties Under Strain

Prolonged tariffs could erode India’s attractiveness as a manufacturing alternative to China, particularly for electronics and smartphones. The situation also casts a shadow over broader strategic ties, even as both nations maintain close defence cooperation and share concerns about China’s influence in the Indo-Pacific.

Despite the trade setback, a joint statement from the US State Department and India’s Ministry of External Affairs on Tuesday reaffirmed the commitment to strengthening bilateral engagement and advancing cooperation under the Quad framework with Japan and Australia.