NEW DELHI: The United States on Tuesday confirmed that the additional 25% tariff on Indian goods will kick in on August 27, taking the overall tariffs to 50%.
According to a notice issued by the US Customs and Border Protection, the additional duties will cover a wide range of Indian exports including textiles, gems and jewellery, leather, machinery, furniture and marine products.
The tariffs are being imposed under US President Donald Trump’s executive order of August 6, announcing a punitive 25% levy on India for buying Russian oil.
The impact will be severe for labour-intensive sectors such as textiles, apparel, gems & jewellery, and marine products, with effective duties climbing as high as 64% once existing most-favoured nation (MFN) rates are added. However, steel, copper, aluminium, smartphones, semiconductors, and automobiles have been spared.
Exporters seek urgent relief in the form of interest subvention schemes and easier access to export credit. The commerce ministry has assured industry of credit support while RBI Governor Sanjay Malhotra pledged financial relief for affected sector, as additional tariffs kick in.
Experts say these measures are not enough. S C Ralhan, president of Federation of Indian Export Organisations, warns 55% of India’s shipments to the US now face a 30-35% pricing disadvantage against exporters from China, Vietnam, Cambodia, and other Asian economies.
Several associations have urged fiscal relief until trade terms are renegotiated under the proposed bilateral trade pact with US.
Mithileshwar Thakur, secretary-general, AEPC, said the sector needs additional funds, moratorium on loan repayments, among others.
Rakesh Mehra, chairman, Confederation of Indian Textile Industry, said finding new markets and clients can’t be done overnight.
The Gem & Jewellery Export Promotion Council has sought reimbursements covering 25-50% of additional tariff.
The Indian SME Forum urged the government to launch the Global Market Intelligence System.
Even as tariff tensions deepen, US Treasury Secretary Scott Bessent struck a note of optimism, saying he was confident of the strength of bilateral ties.
In an interview to Fox Business, Bessent said, “India is the world’s largest democracy, the US is the world’s largest economy. At the end of the day, we will come together.”
On the status of a trade deal, however, he admitted progress had been slow. “We still don’t have a deal. I thought we would have one by May or June. India’s approach has been performative, and while they began negotiating soon after Liberation Day, they’ve kept us tapped along. There’s also the issue of Russian crude purchases, which they have been profiteering on,” he said.
Bessent added that while President Donald Trump and Prime Minister Narendra Modi enjoy a strong rapport at the top level, “this is a complicated relationship, and it’s not just about Russian oil.”
(With additional inputs from Online Desk)