The United States on Wednesday formally enforced a 50 per cent tariff on Indian imports, following U.S. President Donald Trump’s Executive Order 14329 aimed at “addressing threats from the Government of the Russian Federation.”
The tariffs, announced earlier this month, apply to most Indian products entering the U.S. for consumption, though key categories such as iron, steel, aluminum, passenger vehicles, and copper derivatives have been excluded.
Trump had earlier accused India of maintaining “the highest tariffs and most strenuous non-monetary trade barriers in the world,” while continuing to buy energy and defense equipment from Russia. He declared that India would face a 25 per cent tariff plus penalty, which has now been raised to 50 per cent.
Despite the pressure, Prime Minister Narendra Modi asserted on Monday that India would withstand the challenge. “No matter how much pressure comes, we will keep increasing our strength to withstand it. The Atmanirbhar Bharat Abhiyan is gaining energy from decades of hard work,” he said in Ahmedabad.
According to the Global Trade Research Initiative (GTRI), the tariffs impact nearly 70% of India’s exports to the U.S., valued at around USD 60.2 billion, with labor-intensive sectors such as textiles, gems and jewellery, and shrimp exports among the hardest hit.
However, about 30.2% of India’s exports—worth USD 27.6 billion—remain duty-free, including:
- Pharmaceuticals: USD 12.7 billion in cancer drugs, antidiabetics, cardiovascular medicines, and immunosuppressants.
- Electronics: USD 8.18 billion in smartphones, integrated circuits, storage devices, and networking equipment.
- Refined light oil, gasoline, and aviation turbine fuel: USD 3.29 billion.
- Books, brochures, and plastics worth over USD 300 million combined.
Trade experts warn of short-term disruptions for exporters but believe India’s pharma, electronics, and energy sectors will cushion the blow, while new Free Trade Agreements with the UK, EU, Australia, and UAE may help diversify export markets.