US President Donald Trump has imposed 50% tariffs on most US imports from India, punishing New Delhi for its purchases of discounted Russian oil. The tariffs took effect just after midnight on Wednesday in Washington, risking significant damage to the Indian economy and further disrupting global supply chains.
The move doubles the 25% tariffs on Indian goods that went into force earlier this month. The White House argues that India's oil purchases are indirectly funding Russia's war against Ukraine. Indian ministers argue the country has been unjustly singled out, and officials caution that India may now work more closely with Moscow and Beijing.
Most Indian exports to the US, worth $87.3bn last year, now face steep duties, though some key products like smartphones are spared for now. Economists predict a precipitous fall in trade. Goldman Sachs' chief India economist Santanu Sengupta warned that sustained 50% levies could push GDP growth below 6%.
About 30% of India's exports to the US, worth $27.6bn, remain duty-free, but sectors like textiles, gems and jewellery, and seafood face shrinking order books. The Federation of Indian Export Organisations reported that textile and apparel manufacturers in Tirupur, Delhi and Surat have halted production due to worsening cost competitiveness.
Indian shares tumbled before the tariffs, with the BSE Sensex dropping 1% on Tuesday. A senior Indian trade official said the tariffs have damaged trust in future relations with Washington, adding that it will take a long time to rebuild the strategic relationship.
