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| US President Donald Trump speaks during a bilateral meeting at the Trump Turnberry Golf Courses, in Turnberry south west Scotland on July 28, 2025. (Photo by Christopher Furlong / POOL / AFP) |
Firstsitenews-India is grappling with a looming export crisis following U.S. President Donald Trump's decision to double tariffs on Indian goods, in retaliation for New Delhi’s continued importation of Russian oil.
The move which raises tariffs from 25 percent to 50 percent over a three-week period has drawn sharp criticism from Indian officials and business leaders, with fears mounting that the measures could significantly harm India's export-dependent sectors.
India’s stock market reacted cautiously, with the Nifty index slipping 0.31 percent on Thursday after the initial tariff phase took effect.
India remains the second-largest buyer of Russian oil, benefiting from discounted prices that have saved the country billions. However, Washington sees this as indirectly aiding Moscow’s war efforts in Ukraine, prompting Trump’s aggressive tariff escalation.
India’s Ministry of External Affairs condemned the new tariffs, calling them “unfair, unjustified, and unreasonable.”
Severe Impact on Exporters
S.C. Ralhan, President of the Federation of Indian Export Organisations (FIEO), warned that the increased tariffs could cripple Indian trade with the U.S.
“This move is a severe setback for Indian exports, with nearly 55 percent of our shipments to the U.S. directly affected,” Ralhan said in a statement.
He explained that the effective 50 percent tariff places Indian exporters at a 30–35 percent disadvantage compared to competitors from nations with more favorable trade terms.
“Many export orders have already been suspended as buyers reconsider their sourcing strategies,” Ralhan added, stressing that for numerous small and medium-sized businesses, profit margins are already razor-thin. “Absorbing this sudden cost hike is simply not viable.”
Economic Ripple Effects
The U.S. is India’s largest trading partner, with exports totaling $87.4 billion in 2024. Analysts warn that this tariff dispute could threaten India’s economic outlook.
“If the additional 25 percent tariffs remain, it could severely undermine India’s position as a rising global manufacturing hub,” said Shilan Shah, an economist at Capital Economics.
He noted that U.S. consumption accounts for about 2.5 percent of India’s GDP, and warned the increased levies could shave a full percentage point off India’s growth rate.
“With a 50 percent tariff in place, we may see GDP growth fall to around 6 percent this year and next, down from our earlier projection of 7 percent,” Shah said.
As global trade tensions rise, New Delhi faces the challenge of balancing its energy strategy with maintaining critical economic ties a dilemma that could reshape its export trajectory in the coming months.
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