A decision by U.S. President Donald Trump to double tariffs on Indian imports officially took effect on Wednesday, raising duties to 50% on a wide range of products. The move escalates trade tensions between Washington and New Delhi, with potentially sweeping consequences for exporters, consumers, and global supply chains.
The new measure combines a 25% penalty earlier imposed on Indian purchases of Russian oil with the existing 25% tariff on Indian goods, including apparel, gems, jewelry, footwear, sporting goods, furniture, and chemicals. Together, these hikes push duties to 50%, effectively doubling costs for Indian exporters trying to maintain access to the American market.
India’s Commerce Ministry responded by promising financial support for affected exporters and encouraging diversification into other regions such as China, Latin America, and the Middle East. Officials emphasized the need to reduce reliance on U.S. markets while providing exporters with both subsidies and credit relief. The U.S. Customs and Border Protection agency offered a three-week exemption for shipments already en route prior to the tariff deadline, allowing limited breathing space for companies caught in transition.
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U.S. trade officials defended the decision by pointing to what they called “unfairly steep Indian tariffs” on American goods — as high as 100% on cars and an average 39% on agricultural products — compared to Washington’s average of 7.5% duties. They argued that the tariff hikes were necessary to push India toward more balanced trade practices.
The economic stakes are significant. Bilateral trade in goods totaled $129 billion in 2024, with the U.S. running a $45.8 billion deficit. Export associations estimate that the higher tariffs could impact 55% of India’s $87 billion in shipments to the United States, particularly in labor-intensive sectors such as textiles, jewelry, and chemicals.
Analysts warn that the new tariffs could redirect trade flows, creating opportunities for competitors such as Vietnam, Bangladesh, and China. These countries may step in to capture U.S. market share at India’s expense, intensifying regional competition. For now, the tariff hike marks another sharp turn in U.S.-India economic relations, setting the stage for tougher negotiations and potential retaliation in the months ahead.