India gets ready to tackle Trump's 50% tariff hike

Refusing to give in to United States President Donald Trump's bullying tactics, India is working on a multipronged strategy to soften the impact of the 50% tariff that the US imposed on Indian goods from 27 August 2025.

- BY S VENKAT NARAYAN OUR SPECIAL CORRESPONDENT

As per the Global Trade Research Initiative (GTRI), India ships about $86.5 billion worth of goods to the US each year. Of this, roughly $60.2 billion (66%) will now face the 50% tariff. Another $3.4 billion in auto parts remains at 25%, while $27.6 billion, mostly pharma, electronics and petroleum, stays duty-free.

Ajay Srivastava, founder of GTRI, estimates exports from affected sectors could plunge 70%, collapsing from $60.2 billion to $18.6 billion. Overall shipments to the US could fall 43%, threatening hundreds of thousands of jobs across India's export hubs. New Delhi faces one of its toughest trade blows in years

$48.2 billion of India's merchandise exports to that country are set to face the punitive levy. Of particular concern are labour intensive sectors, as exports of textiles, shrimp, leather and gems and jewellery, among others, are expected to be the worst hit. Pharmaceuticals, electronics and petroleum products continue to be exempt from the tariff.

Exporters said textiles and apparel manufacturers in Tiruppur (Tamil Nadu), Noida (Uttar Pradesh) and Surat (Gujarat) have halted production as they are losing ground to lower-cost rivals from Vietnam and Bangladesh.

In the seafood sector, especially shrimp, the tariff increases risk of stockpile losses, disrupted supply chains and farmer distress, as the US market absorbs nearly 40% of Indian seafood exports.

The tariffs came into force 9.30 Wednesday morning. "The duties...are effective with respect to products of India that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am Eastern Daylight Time on August 27," the US Department of Homeland Security said in a draft order.

Meetings at the highest levels are ongoing to assess the situation, though officials ruled out any retaliation.

"Deliberations in the government have been ongoing and meetings with the industry are also taking place," said an official.