US-India ties take a hit after Trump's doubling of tariffs takes effect

US President Donald Trump's doubling of tariffs on imports from India to as much as 50 percent took effect as scheduled on Aug 27, delivering a serious blow to ties between the two countries that became strategic partners after the turn of this century.

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WASHINGTON/NEW DELHI -

A punitive 25 percent tariff imposed due to India's purchases of Russian oil adds to Mr. Trump's prior 25 percent tariff on many imports from the South Asian nation.

It takes total duties to as high as 50 percent for goods such as garments, gems and jewelry, footwear, sporting goods, furniture and chemicals — among the highest imposed by the US and on a par with Brazil and China.

The new tariffs threaten thousands of small exporters and jobs, including in Prime Minister Narendra Modi's home state of Gujarat, and are expected to hurt growth in the world's fastest-growing major economy.

There was no domestic market reaction to the move on Aug 27 as bourses were closed for a Hindu festival, but equity benchmarks logged their worst session in three months on Aug 26 after a Washington notification confirmed the additional tariff.

The Indian rupee also continued its losing streak for a fifth consecutive session on Aug 26, ending at its lowest level in three weeks.

While the tariff disruption would be bruising, it may not be all gloom and doom for the world's fifth-largest economy if New Delhi can further reform its economy and become less protectionist while seeking to resolve the crisis with Washington, analysts said.

India's Commerce Ministry did not immediately respond to a request for comment on Aug 27.