Donald Trump has imposed 50% tariffs on most US imports from India, punishing one of the world's largest economies for its continued purchases of discounted Russian oil. The tariffs, which took effect just after midnight on Wednesday in Washington, risk inflicting significant damage on the Indian economy and further disrupting global supply chains.
The US president argued that New Delhi's purchases indirectly fund Russia's war against Ukraine. The move comes after earlier 25% tariffs on Indian goods went into force this month, with the rate now doubled. Indian exporters now face among the highest US duties Trump has imposed on foreign goods, with Brazil also facing similar 50% tariffs.
Indian ministers argue the country has been unjustly singled out, warning that India may drift closer to Moscow and Beijing as a result. Most Indian exports to the US, valued at $87.3bn last year, now face steep duties, though smartphones and some key products are spared for now. The mood in India is defiant, with Prime Minister Narendra Modi urging citizens to buy only 'made in India' goods.
Goldman Sachs chief India economist Santanu Sengupta warned that sustained 50% levies could push GDP growth below 6%. 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 fell, with the BSE Sensex dropping 1% on Tuesday.
The tariffs have strained relations with a key ally, and a senior Indian trade official said trust between the two countries has been damaged, calling it a 'biggest casualty' that will take time to rebuild. External Affairs Minister S Jaishankar described Washington's demand that India cease buying Russian crude as 'unjustified'.
