US President Donald Trump has imposed 50% tariffs on most American imports from India, punishing New Delhi for its continued purchases of discounted Russian oil. The White House argues that these purchases indirectly fund Russia's war in Ukraine. The tariffs took effect just after midnight on Wednesday in Washington.
The move significantly raises duties on Indian goods, which already faced 25% tariffs earlier this month. Only a few products, including smartphones, are spared. According to the US trade representative, Indian exports to the US were worth $87.3 billion last year. Economists warn that sustained 50% levies could push India's GDP growth below 6%.
Indian ministers have protested the action, saying the country is being unjustly singled out. Prime Minister Narendra Modi urged Indians to buy local, and officials cautioned that New Delhi may move closer to Moscow and Beijing as a result. The Federation of Indian Export Organisations reported that textile manufacturers in several cities have halted production due to worsening cost competitiveness.
Goldman Sachs economist Santanu Sengupta noted that at a 50% tariff, exports become very difficult. Rival exporters from Turkey to Thailand, facing lower US tariffs, are already attracting American buyers. Indian shares fell ahead of the tariffs, with the BSE Sensex dropping 1% on Tuesday.
A senior Indian trade official, speaking anonymously, said the tariffs have damaged trust, warning that it will take a long time to rebuild the strategic relationship. External Affairs Minister S Jaishankar called Washington's demand that India stop buying Russian crude 'unjustified'.
