MUMBAI/NEW DELHI — Indian exporters are bracing for disruptions after a US Homeland Security notification confirmed Washington would impose an additional 25 percent tariff on all Indian-origin goods from Wednesday, ramping up trade pressure on the Asian nation.
Indian exports will face US duties of up to 50 percent – among the highest imposed by Washington – after President Donald Trump announced extra tariffs as punishment for New Delhi’s purchases of Russian oil.
The new duties will apply to goods entering the US for consumption or withdrawn from warehouses for consumption from 12:01 a.m. EDT on Wednesday or 9:31 a.m. IST, according to the Homeland Security notice.
The Indian rupee weakened 0.2 percent to 87.75 per US dollar in early trade, even as the greenback declined against many other currencies. The benchmark equity indexes and were each trading 0.7 percent lower.
White House trade adviser Peter Navarro and US Treasury Secretary Scott Bessent have accused India of indirectly funding Russia’s war against Ukraine by boosting Russian oil purchases, and said that must stop.
Bessent earlier this month said India was profiteering from its sharply increased purchases of Russian oil, which now accounts for 42 percent of India’s total oil imports, up from under 1 percent before the war – a shift Washington has called unacceptable.
India’s Commerce Ministry did not immediately respond to an email seeking comment on the latest notification.
“The government has no hope for any immediate relief or delay in US tariffs,” said a Commerce Ministry official, who spoke on condition of anonymity because they were not authorised to speak to media.
Exporters hit by tariffs would be provided financial assistance and encouraged to diversify to alternative markets including China, Latin America and the Middle East, the official added.
“The government has identified nearly 50 countries for increasing Indian exports, particularly of textiles, food processed items, leather goods, marine products.”
US stocks ended lower on Monday, with the Dow losing more than three-quarters of a percent, the S&P 500 shedding more than four-tenths of a percent and the Nasdaq ticking down by about two-tenths of a percent.
Exporter groups estimate hikes could affect nearly 55 percent of India’s $87 billion in merchandise exports to the US, while benefiting competitors such as Vietnam, Bangladesh and China.
“The US customers have already stopped new orders. With these additional tariffs, the exports could come down by 20-30 percent from September onward,” said Pankaj Chadha, president, Engineering Exports Promotion Council.
Chadha added that the government has promised financial aid including increased subsidies on bank loans and support for diversification in the event of financial losses.
“However, exporters see limited scope for diversifying to other markets or selling in the domestic market,” he said.
Exports by India’s diamond industry have already hit a two-decade low on weak Chinese demand, and now higher tariffs threaten to sever access to its largest market, which accounts for nearly a third of its $28.5 billion annual shipments of gem and jewellery.
