Trump's Tariff Bomb

India's once-cozy relationship with the US is turning complex, with the Donald Trump administration slapping restrictions like steep tariffs and H-1B visa fees. Is India ready to weather the storm?

- Kundan Kishore

For the past few months, what has dominated the collective imagination of the country, particularly equity investors, is US trade tariffs. US President Donald Trump dropped the first bomb on July 30 when he announced to impose a 25 per cent tariff on India. Barely a week later, on August 6, came the second strike: a “punitive” tariff of another 25 per cent for India’s continued purchase of Russian oil. This second tranche of tariff came into effect after August 27, 2025, the interim serving as a warning period for India. The steep cumulative tariff of 50 per cent has affected a range of export-oriented sectors, such as textiles and gems and jewellery.

The dust from the tariff hike was yet to settle when Trump dropped another bombshell on September 19—a massive increase in H-1B visa fees to $100,000, making it prohibitively expensive for companies to hire Indian professionals in the US. The increase in visa fees has sent a wave of panic among Indian employees aspiring to work in the US and lent a body blow to the Indian information technology (IT) industry, a major beneficiary of the programme. From October 2022 to September 2023, Indians received 72 per cent of the 400,000 H-1B visas issued, making them one of the largest beneficiaries.

The H-1B visa fee shock has only deepened uncertainty, which may continue with newer announcements coming in. For instance, just before going to press on September 26, came in another shocker on September 25. Trump has declared 100 per cent tariff on branded pharma imports effective October 1, jolting the market.