NEW DELHI — Indian exporters are bracing for significant disruptions as the United States rolls out steep new tariffs on Indian goods valued under $800, effective Wednesday, August 27, 2025. The move, reported by Reuters, follows President Donald Trump’s decision to impose a 25% additional tariff, raising total duties to as high as 50% among the highest levied on any U.S. trading partner. The tariffs, announced by the U.S. Department of Homeland Security, target India’s $87 billion export market to the U.S., citing New Delhi’s increased purchases of Russian oil as a key trigger.
The new duties, effective from 12:01 a.m. EDT Wednesday, apply to goods entering the U.S. for consumption or withdrawn from warehouses. “The government has no hope for immediate relief,” a Commerce Ministry official told Reuters, speaking anonymously due to lack of authorization. The official added that India plans to provide financial aid to affected exporters and encourage diversification to markets like China, Latin America, and the Middle East. The Indian rupee weakened 0.17% to 87.7275 against the dollar in early trading Tuesday, reflecting market unease.
Key sectors impacted include:
- Textiles and apparel, facing duties up to 63.9%, affecting $10.3 billion in exports.
- Gems and jewelry, with $12 billion in shipments hit by a 52.1% tariff.
- Shrimp exports, valued at $2.24 billion, now facing a 33.26% duty with existing anti-dumping fees.
The tariffs stem from Trump’s claim that India’s oil trade indirectly funds Russia’s war in Ukraine, a charge echoed by Vice President JD Vance, who noted Trump’s use of “aggressive economic leverage.” Indian Foreign Minister S. Jaishankar countered that the U.S. inconsistently targets India compared to other oil buyers like China. Prime Minister Narendra Modi, addressing exporters Monday, vowed, “No matter how much pressure comes, we will keep increasing our strength to withstand it.”
Exporters warn of a 20-30% drop in U.S.-bound shipments, with small businesses particularly vulnerable. “Orders are already on hold,” said Pankaj Chadha of the Engineering Exports Promotion Council. As India eyes trade talks with a U.S. delegation in late August, the tariffs threaten to strain a $190 billion bilateral trade relationship, with broader economic impacts looming.
Source: Reuters
