The United States implemented a 50 percent tariff on Indian goods, following an initial 25 percent levy and a subsequent additional 25 percent citing New Delhi's purchase of Russian oil. The tariff covers gems, jewellery, garments, footwear, furniture, industrial chemicals and other manufactured items. The measure reduces India's export competitiveness relative to China and risks undermining plans to expand domestic manufacturing. The Global Trade Research Initiative projects Indian exports to the US could drop from $86.5 billion to about $50 billion by 2026. Labour-intensive sectors such as textiles, gems, jewellery, shrimp, carpets, fisheries, leather and crafts face steep export losses and large job risks.
The new 50 percent rate, one of the US's highest tariffs, will now apply to a range of goods from gems and jewellery, garments, footwear and furniture to industrial chemicals. The crushing tariff rate will put India at a disadvantage in export competitiveness against China, and will undermine the economic ambitions of Prime Minister Narendra Modi to transform the country into a major manufacturing hub.
The Global Trade Research Initiative (GTRI), a New Delhi-based think tank, told The Financial Times newspaper that Indian exports to the US could fall from $86.5bn this year to about $50bn in 2026 as a result of today's announcement. The GTRI said that textiles, gems, jewellery, shrimp and carpets would be worst affected, with the sectors bracing for a 70 percent collapse in exports, endangering hundreds of thousands of jobs.
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