U.S. tariffs of 50% took effect on many Indian products, doubling an existing duty as a response to India's purchases of Russian oil. The tariffs aim to pressure India over energy transactions that generate revenue for Russia's war in Ukraine and have strained bilateral ties, potentially pushing India closer to China. Exemptions cover sensitive sectors such as pharmaceuticals, computer chips, smartphones, steel, aluminum and automobiles, while investigations could lead to further duties. The measures risk hurting Indian exporters, with cancelled orders, competitive losses and potential job cuts reported, prompting Indian leaders to pledge economic responses.
U.S. tariffs of 50% took effect Wednesday on many Indian products, doubling an existing duty as President Donald Trump sought to punish New Delhi for buying Russian oil. Trump has raised pressure on India over the energy transactions, a key source of revenue for Moscow's war in Ukraine, as part of a campaign to end the conflict. The latest salvo strains U.S.-India ties, giving New Delhi fresh incentive to improve relations with Beijing.
While Trump has slapped fresh duties on allies and competitors alike since returning to the presidency in January, this 50% level is among the highest that U.S. trading partners face. Crucially, however, exemptions remain for sectors that could be hit with separate levies-like pharmaceuticals and computer chips. The Trump administration has launched investigations into these and other sectors that could culminate in further duties. Smartphones are in the list of exempted products as well.
The United States was India's top export destination in 2024, with shipments worth $87.3 billion. But analysts have cautioned that a 50% duty is akin to a trade embargo and is likely to harm smaller firms. Exporters of textiles, seafood and jewelry were already reporting cancelled U.S. orders and losses to rivals such as Bangladesh and Vietnam, raising fears of heavy job cuts.
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