Additional 25% US tariffs kick in today, textiles to take hit
India’s exports may drop 43% to $49.6b in current financial year
New Delhi: Indian goods imported into the US will attract 50 per cent tariff as the additional 25 per cent Trump tariff slapped as a penalty for the purchase of Russian crude oil kicks in on Wednesday.
According to Kashmir Media Service, the US Department of Homeland Security on Tuesday issued a notification confirming the imposition of 25 per cent additional tariff on Indian goods. The US tariff will severely impact labour-intensive sectors such as textiles, gems and jewellery, shrimp and carpets.
The Trump administration accused New Delhi of imposing “Maharaja tariff”, which is allegedly responsible for US’ over $40-billion trade deficit with India, and of financing Russia’s war efforts in Ukraine. The US has objected to India’s crude oil purchase from Russia, which significantly increased after the Ukraine war. According to government data, India imported around 1.8 million barrels per day of Russian crude oil, valued at approximately $49 billion in 2024.
The 25 per cent additional tariff will be over and above the existing 25 per cent reciprocal tariff that imports from India have been subjected to by the US since August 7.
While the Ministry of Commerce and Industry has not given any official response to the development yet, officials said the government was considering financial assistance to exporters hit by the tariff, besides encouraging market diversification.
The stock market experienced a significant downturn following the confirmation of the additional 25 per cent tariff. The Sensex ended at 80,786.54, down 849.37 points or 1.04 per cent. The Nifty settled at 24,712.05, down 255.70 points or 1.02 per cent. Trade experts projected that the tariff may slash India’s exports to the US to $49.6 billion in the current financial year, 43 per cent down from $86.5 billion in the last fiscal.
Federation of Indian Export Organisations (FIEO) president SC Ralhan termed the US tariff a setback, adding that it could severely impact India’s exports to the US. He said approximately 55 per cent of India’s US-bound shipments (worth $47-48?billion) were now exposed to pricing disadvantages of 30 to 35 per cent, rendering these uncompetitive in comparison to its competitors from China, Vietnam, Cambodia, the Philippines and other southeast and South Asian countries.
