The United States has imposed a sharp increase in duties on Indian goods, raising tariffs to 50 percent on several imports. The measure, announced by the Trump administration, is aimed at pressuring New Delhi over its continued purchases of discounted Russian oil.
The new tariffs, which took effect on Wednesday, are expected to impact India’s trade with its largest export destination. India shipped goods worth more than $87 billion to the US in 2024, and the Indian government has estimated that nearly $48 billion of these exports could be directly affected. Officials in New Delhi have described the move as unfair and warned that it could render Indian exports commercially unviable, potentially triggering job losses and slowing economic growth in the country.
Earlier this month, Washington had already imposed a 25 percent duty on Indian products, as part of a broader wave of tariffs targeting both allies and rivals. The latest escalation doubles that rate, placing Indian exporters among those facing the highest duties levied by the current US administration. Brazil, similarly, is contending with 50 percent tariffs on its own exports to the US.
The decision comes against the backdrop of India’s deepening energy ties with Russia. Over one-third of India’s crude oil purchases in the previous year came from Russia, a trade link that Washington contends contributes indirectly to Moscow’s war effort in Ukraine. Senior advisers within the Trump administration have accused India of overlooking its role in the conflict by maintaining this trade.
Analysts believe the tariff shock will be felt most severely in labour-intensive industries such as textiles, garments, gems and jewellery, marine products, select automobile exports, and leather goods. Many of these sectors are dominated by small and medium enterprises, raising concerns of widespread employment losses.
A New Delhi-based trade research institute has cautioned that the new duties could significantly diminish India’s market share in the US, disrupting export-driven hubs and weakening the country’s place in global industrial supply chains.
While sectors such as pharmaceuticals and electronics have been temporarily spared from the higher tariffs, investigations are ongoing that could extend duties to these industries as well. Meanwhile, the US is also pushing for greater access to India’s agriculture and dairy markets, areas where New Delhi has long resisted American demands.
The Indian Prime Minister Narendra Modi has reiterated that protecting the interests of farmers, small businesses, and domestic industries remains a priority, signaling that his government will not bow to external pressure on trade negotiations.
