The new tariff on top of the existing 25% duty places US imports from India under one of the highest tax brackets in the US, totalling 50%.
President Trump also justified the action by citing Russia’s military involvement in Ukraine as a “national emergency”, necessitating stronger measures.
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“The actions and policies of the Government of the Russian Federation continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States,” stated Trump’s executive order.
The tariff hike on Indian imports is set to take effect on 27 August, leaving a brief period for India and the US to potentially negotiate a lower rate.
Meanwhile, the Indian Ministry of External Affairs (MEA) has swiftly condemned the new tariffs, terming it as “unfair, unjustified and unreasonable”.
India’s exports to the US amounted to nearly $87.3bn in 2024, surpassing US exports to India, which stood at $41.5bn, as per US government trade statistics.
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By GlobalData“It is (therefore) extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest. India will take all actions necessary to protect its national interests,” a statement from official spokesperson of MEA reads.
The move could thwart India’s plans of absorbing orders, particularly in the apparel and textile segment, as China falls out of favour with the US.
Earlier, Neil Saunders, analyst at GlobalData told Just Style India’s “steep tariff rate” made it far less competitive as a manufacturing hub.
“For products like apparel, where every cent matters, many retailers may now look beyond India. India’s dreams of tariffs on China sending business its way will now fade. This might not happen immediately as a lot of retailers and brands are taking a wait and see approach. However, a more certain tariff environment is now falling into place with the various trade deals, and it looks like India will be one of the losers.”
