U.S. tariffs on a range of Indian products were increased, combining an initial 25% duty with an additional 25% tied to India's purchases of Russian oil, raising the effective rate to 50%. The Indian government estimates $48.2 billion in exports will be affected. Officials warn the new duties could render shipments commercially unviable, causing job losses and slower economic growth. Labor-intensive sectors such as textiles, gems and jewelry, leather goods, food and automobiles face the greatest risk. Some sectors, including pharmaceuticals and electronic goods, have been temporarily exempted from the additional tariffs. Exporters report immediate shock and concern.
But earlier this month he signed an executive order imposing an additional 25% tariff due to India's purchases of Russian oil, bringing the combined tariffs imposed by the U.S. on its ally to 50%.
"The new tariff regime is a strategic shock that threatens to wipe out India's long-established presence in the U.S., causing unemployment in export-driven hubs and weakening its role in the industrial value chain," said Ajay Srivastava, the think tank's founder and a former Indian trade official.
The U.S. has for now exempted some sectors such as pharmaceuticals and electronic goods from additional tariffs, bringing some relief for India as its exposure in these sectors is significant.
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