The additional US tariffs on Indian imports came into effect from 9.31 am after Washington issued a draft notice announcing plans to implement Trump's additional 25 per cent tariffs starting Wednesday, August 27. The move is set to impact goods worth more than USD 48 billion in exports to the US.
With this move, the total tariff on most Indian goods entering the US market will rise to 50 per cent, with certain exceptions. The US had earlier imposed a 25 per cent tariff on Indian products on August 7 and announced the second 25 per cent hike as a penalty for India's purchase of Russian crude oil and military equipment.
According to the draft order published by the US Department of Homeland Security on Monday, the increased levies will apply to Indian goods that are “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am eastern daylight time on August 27, 2025”.
Exempted goods
However, Indian products will be exempt from the new tariff if they were already shipped and in transit to the US before the deadline, provided they are cleared for use or withdrawn from a warehouse before September 17, 2025. Importers must also declare a special code to US Customs to claim the exemption.
Sectors such as pharmaceuticals, energy products, and electronic goods will remain outside the ambit of these sweeping duties.
Besides India, Brazil is the only other trading partner facing a 50 per cent import duty.
Indian sectors to be affected by US tariffs
The increased tariffs will heavily impact several labour-intensive and export-oriented sectors, including:
- Textiles and clothing
- Gems and jewellery
- Shrimp
- Leather and footwear
- Animal products
- Chemicals
- Electrical and mechanical machinery
Value of Indian exports to US
According to the Commerce Ministry, Indian merchandise exports worth around USD 48.2 billion, based on 2024 trade values, will be subject to the additional tariffs.
A report by think tank GTRI states that 66 per cent of India’s exports to the US, amounting to USD 60.2 billion, will now face the 50 per cent tariff. These include apparel, textiles, gems and jewellery, shrimp, carpets, and furniture, which will see a major erosion of competitiveness in the US market.
About 3.8 per cent of exports (USD 3.4 billion), primarily auto components, will face a 25 per cent duty, while 30.2 per cent of exports (USD 27.6 billion) will continue to enter the US duty-free.
Products and regions under pressure
- Shrimp exports worth USD 2.4 billion, particularly from Visakhapatnam farms
- Diamonds and jewellery exports worth USD 10 billion, impacting jobs in Surat and Mumbai
- Textiles and apparel exports of USD 10.8 billion, affecting Tirupur, NCR, and Bengaluru
- Carpets (USD 1.2 billion) and handicrafts (USD 1.6 billion) losing ground to Turkey and Vietnam
- Agrifood items like basmati rice, spices, and tea (USD 6 billion), benefiting competitors like Pakistan and Thailand
- Steel, aluminium, copper (USD 4.7 billion), organic chemicals (USD 2.7 billion), and machinery (USD 6.7 billion)
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