Trump's 50% trade tariffs on Indian goods come into effect

Steep US tariffs on a range of Indian products took effect on Wednesday, threatening a steep blow to India's overseas trade in its largest export market.

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President Donald Trump had initially announced a 25% tariff on Indian goods. But earlier this month he signed an executive order imposing an additional 25% tariff due to India’s purchases of Russian oil, bringing the combined tariffs imposed by the US on its ally to 50%.

The Indian government estimates the tariffs will impact $48.2 billion worth of exports. Officials have warned the new duties could make shipments to the US commercially unviable, triggering job losses and slower economic growth.

Prime Minister Narendra Modi has vowed not to yield to the pressure.

"For me, the interests of farmers, small businesses and dairy are topmost. My government will ensure they aren't impacted," Modi said at a rally this week in his home state of Gujarat.

Modi said the world was witnessing a "politics of economic selfishness."

The extreme US tariffs are nothing less than "economic blackmail", but they may also be the shock therapy India needs to break free of complacency and dependence, economists have stressed.

If industry, policymakers, and diplomats act in concert, today's tariff terror could become tomorrow's trigger for transformation, they added. "The task ahead is difficult, but with sincerity of purpose and concerted efforts, we can -- and we will -- surmount this challenge. What is required is to go full steam ahead and fire on all cylinders," said Manoranjan Sharma, Chief Economist at Infomerics Ratings.