- By Ajeet Kumar
- Tue, 26 Aug 2025 03:40 PM (IST)
- Source:JND
Trump's tariff impact on India: The steep 50 per cent tariff on Indian goods entering the United States will take effect from August 27, severely impacting several labour-intensive export sectors such as shrimp, apparel, leather and gems and jewellery. The high additional import duties would affect more than half of the USD 86 billion Indian exports to America, while the remaining items, including pharmaceuticals, electronics, and petroleum products, will continue to be exempt from the levy.
Is there any way of Indian goods be exempted from Trump's tariff?
According to a US notification, "the duties... are effective with respect to products of India that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am Eastern Daylight Time on August 27, 2025" (or 9:31 AM IST August 27).
However, Indian products will be exempt from the new 50 per cent tariff if they were “already loaded on a ship and in transit to the US before 12:01 am (EDT) on August 27, 2025, provided they are cleared for use in the country or taken out of a warehouse for consumption before 12:01 am (EDT) on September 17, 2025, and the importer certifies this to US Customs by declaring the special code HTSUS 9903.01.85”.
Impact of Trump's 50 per cent tariff on India
1. At present, a 25 per cent additional duty is already in place on Indian goods entering the US market. Another 25 per cent will be slapped as a penalty for purchasing Russian crude oil and military equipment.
2. According to exporters, this "prohibitive" duty will drive out a number of Indian goods from the US market, as major competing countries like Bangladesh, Vietnam, Sri Lanka, Cambodia, and Indonesia have much lower duties on their goods.
3. Certain firms are front-loading the consignments to America before the increased tariffs take effect. This was reflected in July's trade data. India's goods exports to the US rose 19.94 per cent to USD 8.01 billion in July, while imports increased 13.78 per cent to about USD 4.55 billion during the month.
4. During April-July, the country's exports to the US increased 21.64 per cent to USD 33.53 billion, while imports rose 12.33 per cent to USD 17.41 billion.
5. An industry official from the leather and footwear sector said that companies would now be compelled to reduce staff and halt production until there is clarity on the proposed bilateral trade agreement (BTA) between the two countries. It aims to double the bilateral trade in goods and services to USD 500 billion, from the current USD 191 billion.
What experts say on Trump's 50 per cent tariff on India
Sharing similar views, an exporter from gems and jewellery said that "job cuts will happen for sure in the jewellery and diamond sectors as the US is our largest market. "We need a long-term export strategy to deal with these high tariffs. We need interest subsidy, ease of doing business, timely refund of GST dues and reformed special economic zone law," the exporter said.
Mithileshwar Thakur, Secretary General, AEPC (Apparel Export Promotion Council), said the textiles sector, with exports of USD 10.3 billion, is one of the worst-impacted sectors.
"The industry was reconciled to the 25 per cent reciprocal tariff announced by the US, as it was prepared to absorb a part of the tariff increase. But, the additional burden of another 25 per cent... has effectively driven the Indian apparel industry out of the US market as the gap of 30-31 per cent tariff disadvantage vis-a-vis major competing countries like Bangladesh, Vietnam, Sri Lanka, Cambodia and Indonesia is well-nigh impossible to bridge," he said.
(With inputs from agency)