US President Donald Trump’s 50% tariffs on most imports from India came into effect on Wednesday.
The US first imposed 25% tariffs on the country in early August, as New Delhi and Washington could not arrive at a trade agreement. Trump then announced an additional 25% on India effective August 27 for New Delhi’s continued purchases of Russian oil.
The talks between India and the US failed in early August since New Delhi was not willing to open up sectors such as agriculture and dairy to American businesses.
Trump’s new tariffs will make many Indian products prohibitively expensive in the US, which is among the few trade partners with whom India enjoys a surplus. In the 2024-25 fiscal year, bilateral trade between India and the US stood at $131.8 billion, with a trade surplus of $41.18 billion in favor of New Delhi.
Gems and jewelry, seafood, and textiles are among the most affected sectors by the latest tariffs. Pharmaceuticals, smartphones, computers and other electronics, refined fuels, and raw drug materials are exempted from the tariffs. The exempted category accounts for almost 30% of Indian exports to the US.
“Economic selfishness is on the rise globally and we must not sit and cry about our difficulties, we must rise above and not allow others to hold us in their clutches,” Indian Prime Minister Narendra Modi said on Tuesday
He called for increased self-reliance within the South Asian country. “All of us should follow the mantra of buying only ‘Made in India’ goods,” Modi said, while also encouraging shopkeepers to prominently display signs promoting Indian goods.
He acknowledged that India may face increased pressure from the tariffs, but stated that the country is willing to endure it.
To offset the impact, India plans to reduce its consumption tax by October, when the country celebrates Diwali, the Hindu festival of lights, which coincides with the South Asian nation’s largest shopping period.
Last week, Indian Foreign Minister S. Jaishankar said the country is “perplexed” by the logic of secondary sanctions imposed by the US for its purchasing Russian oil.
Trump has also imposed 50% tariffs on Brazil.
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