The tariffs imposed by US President Donald Trump have come into effect, causing anxiety among business owners, exporters, and analysts. Initially, the tariff was set at 25 percent, but it has since been increased to 50 percent on India’s importation of Russian oil.
The calculation for the tariff consists of a 25 percent tax along with an additional 25 percent penalty, which has been enacted in response to perceived “threats to the United States by the government of the Russian Federation,” penalizing India for purchasing Russian oil either directly or indirectly.
Almost half of India’s exports, valued at $87.3 billion, will be impacted by the 50 percent tariffs. The affected sectors include textiles, apparel, gems and jewellery, seafood, leather goods, steel, aluminium, copper, organic chemicals, and handicrafts.
Concerns from Business Organizations
The Federation of Indian Export Organisations (FIEO) has expressed significant concern regarding the US government’s decision to impose an additional 25 percent tariff on goods originating from India, which raises the total duties on various export categories to as high as 50 percent, effective August 27, 2025.
This action is anticipated to greatly disrupt the flow of Indian exports to the US, which is India’s largest export market. FIEO President SC Ralhan described this development as a substantial setback, cautioning that it could severely undermine India’s competitiveness in the US market.
Approximately 55 percent of India’s exports to the US, estimated at around USD 47-48 billion, will now encounter a pricing disadvantage of 30–35 percent, rendering them less competitive in comparison to products from China, Vietnam, Cambodia, the Philippines, and other Southeast and South Asian countries.
Manufacturers of textiles and apparel in Tirupur, Noida, and Surat have halted production as increasing costs diminish their competitiveness. The sector is progressively losing market share to lower-cost producers in Vietnam and Bangladesh.
At the same time, the seafood sector, especially shrimp exporters, is encountering substantial risks, given that the United States represents almost 40 percent of India’s seafood exports. The increase in tariffs is likely to lead to inventory losses, disruptions in the supply chain, and considerable hardship for farmers.
The Confederation of Indian Textile Industry (CITI) stated, “We anticipate immediate and direct assistance from the government to tackle the enormous challenge faced by India’s textile and apparel exporters due to the 50 percent tariff imposed by the US on Indian products, which is set to take effect on August 27.”
