US Issues Notice to Impose 50% Tariff on Indian Goods from Wednesday

The United States on Tuesday notified the implementation of additional 25% duties on Indian goods, thereby raising the overall tariff to 50%, to be effective from August 27.

According a the notice issued by the US Customs and Border Protection (CBP), the tariff will cover a wide spectrum of Indian exports, including textiles, gems and jewellery, leather, machinery, furniture and marine products. However, a few items like steel, copper and aluminium and sectors like pharmaceuticals, electronics and automobiles -- passenger vehicles like SUV and sedan -- have been exempted.

The additional tariffs are being imposed to give effect to the President's Executive Order 14329 of August 6, 2025, titled "Addressing Threats to the United States by the Government of the Russian Federation."

The CBP clarified that from 12:01 am eastern daylight time on that day, the higher tariffs will apply to all products of India that are either entered for consumption in the US or withdrawn from warehouses for consumption.

Industry exporters fear the new tariff will affect their profit margins and eventually slowdown in shipments to the US.

With Washington being India’s largest export market for a large chunk of the goods, exporters fear tapping a new market with similar demand will be challenging for many sectors.

The Commerce Ministry has assured exporters that the government will take all possible measures to safeguard them from the ongoing global uncertainties. However, the Indian government hasn't come up with any retaliatory measures so far against the US.

On July 30, US President Donald Trump announced a 25% tariff on Indian imports as part of a broader trade war in which he imposed duties on more than 90 countries. A week later, on August 6, he imposed an additional 25% levy, calling it a “penalty” for India’s continued purchase of Russian oil, taking total tariffs on New Delhi to 50%.

On Monday, Prime Minister Narendra Modi remained firm ahead of the 50% US tariffs on Indian goods, saying his government will find a way out regardless of the economic pressure by Washington.

He assured small shopkeepers, farmers, and livestock rearers that the government would protect their interests. “We will bear any pressure. Modi will never allow you to be harmed,” Modi said.

RBI Governor Sanjay Malhotra said on Monday that the central bank will provide special support for sectors impacted by tariffs and noted that the overall impact on the economy would be minimal, expressing confidence that trade negotiations for lower duties would eventually bear fruit.

Last week, External Affairs Minister S Jaishankar had outlined India’s “red lines” in ongoing trade talks with Washington and sharply criticised what he called “unjustified and unreasonable” tariff hikes imposed by the Trump administration. He added that India would not compromise on the interests of its farmers and small producers.

“Trade is really the major issue between our countries,” Jaishankar said.

“The negotiations are still going on. The bottom line is, we have some red lines. And those are the interests of our farmers and small producers. That’s not something we can compromise on,” he added.

With the new tariffs taking effect immediately, exporters are bracing for a turbulent period ahead, even as exempted sectors attempt to leverage their reprieve.