US President Donald Trump’s new tariff measures on Indian goods came into force on Wednesday, Aug, 27th doubling duties to as high as 50% on products including garments, gems, jewelry, footwear, furniture, chemicals and sporting goods. The move escalates trade tensions between the two democracies and threatens thousands of small exporters and jobs in India.
The hike combines a 25% punitive tariff on Indian imports linked to Russian oil purchases with an existing 25% duty already in place. Exporters in India’s Gujarat and other regions are expected to be heavily affected, though the Commerce Ministry has pledged financial support and efforts to diversify exports to markets such as China, Latin America, and the Middle East.
Exemptions were granted for goods already in transit before the deadline, as well as for certain items like steel, aluminum, copper, and vehicles covered under separate tariff laws. The tariff escalation follows five failed rounds of negotiations, with India expecting a tariff cap of 15% like other US partners, but talks collapsed due to political misjudgment and missed signals. India currently imposes an average 7.5% tariff on US goods, though the US has long criticized higher duties on autos and farm products.
The new tariffs could hit 55% of India’s $87 billion exports to the US, undermining its role as a manufacturing alternative to China and benefiting rivals such as Vietnam, Bangladesh, and China. Despite trade tensions, both countries stressed their security and strategic partnership, reaffirming commitments to cooperation within the Quad (US, India, Japan, Australia).
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