U.S. 50% Tariff on Indian Exports Deep Dive into Market Impact

On August 27, 2025, the United States imposed an additional 25% punitive tariff on Indian exports on top of an existing 25% tariff raising cumulative duties to a staggering 50%.

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This measure, enacted under Executive Order 14329, was a response to India's continued import of Russian oil, which Washington views as indirectly enabling Russia's military action in Ukraine.

Sector-Wise Impact on Indian Exports

Textiles & Ready-Made Garments (RMG)

India's textile industry faces a severe blow. CRISIL forecasts that revenue growth for over 120 RMG manufacturers (collectively generating ₹45,000 crore) could be halved due to diminished competitiveness in the U.S. market.

Gems & Jewellery

With the U.S. accounting for 30-40% of India's gems and jewelry exports (~$10 billion), the tariff surge from 2.1% to over 50% poses an existential threat to MSMEs in hubs like Surat and Mumbai's SEEPZ SEZ. Up to 50,000 jobs have already been lost, and the industry warns of further widespread layoffs.