US Tariffs Cloud Outlook for Indian Exports, GDP Growth

Trump says the move was necessary to address America's 'massive trade deficit' with India

- Rhik Kundu

The US's imposition of a 25% tariff on Indian exports starting August 1 has cast a shadow over bilateral trade, creating fresh uncertainty for exporters.

In addition, uncertainty over a potential penalty, tied to oil and defense purchases from Russia, may cloud pricing strategies and disrupt supply chain planning, making it harder to estimate landed costs. This was set to weigh on short-term business sentiment, analysts said.

"Without clarity on the quantum of the penalty, Indian exporters and the US importers are left with no firm basis to calculate landed costs or assess how the tariff burden can be absorbed," said Ajay Sahai, director general and chief executive at the Federation of Indian Export Organisations (FIEO). "This ambiguity disrupts supply chain planning and pricing strategies," he added.

President Donald Trump, in a post on his Truth Social platform on Wednesday, announced that Indian exports to the US will face a 25% tariff starting August 1, along with additional penalty for buying oil and military equipment from US-sanctioned Russia.