India is preparing for a severe blow to its exports as steep U.S. tariffs on Indian goods came into force Wednesday, threatening more than half of the country’s shipments to its largest overseas market.
President Donald Trump had initially announced a 25% duty, but earlier this month signed an executive order imposing an additional 25% penalty over India’s purchase of Russian oil. The combined 50% tariff now applies to a wide range of Indian products.
According to government estimates, $48.2 billion worth of exports will be affected, with officials warning the new duties could make sales to the U.S. unviable, leading to job losses and slower growth.
Labor-intensive sectors such as textiles, gems and jewelry, leather goods, food and automobiles are expected to be hardest hit, according to the Global Trade Research Initiative. “The new tariff regime is a strategic shock that threatens to wipe out India’s long-established presence in the U.S.,” said its founder Ajay Srivastava.
Exporters fear small and medium enterprises will suffer most. “This is an absolute shock,” said Puran Dawar, a footwear exporter in Agra. “The U.S. should understand that these steep tariffs will hurt its own consumers.”
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Prime Minister Narendra Modi has vowed not to yield to U.S. pressure to open India’s agriculture and dairy markets. “For me, the interests of farmers, small businesses and dairy are topmost,” he said this week.
India is now weighing tax cuts, export incentives and new trade deals to cushion the impact.
Source: Agency