India readies for punishing tax

INDIAN exports to the US will face some of the highest tariffs in the world this week, barring a last-minute reversal from President Donald Trump.

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Trump has tied issues of war and peace to trade, threatening to slap 50% duties on New Delhi in retaliation for its continued purchases of Russian oil -which Washington argues help finance Moscow’s war in Ukraine.

The tariff offensive has rattled US-India ties, given New Delhi a new incentive to repair relations with Beijing, and carries major consequences for the world’s fifth-largest economy.

Trump issued a three-week deadline on August 6, which was expected to take effect today in India.

The US was India’s top export destination in 2024, with shipments worth $87.3 billion.

Analysts at Nomura warn that 50% duties would be “akin to a trade embargo’, devastating smaller firms with “lower value add and thinner margins”.

Elara Securities’s Garima Kapoor said no Indian product can “stand any competitive edge” under such heavy import taxes.

Economists estimate tariffs could shave 70 to 100 basis points off India’s GDP growth this fiscal year, dragging growth below six percent, the weakest pace since the pandemic.

Exporters in textiles, seafood and jewellery are already reporting cancelled US orders and losses to rivals such as Bangladesh and Vietnam, raising fears of heavy job cuts.