United States President Donald Trump’s 50 percent tariff on Indian goods, which is expected to impact trade worth billions of dollars and risk thousands of jobs in the world’s most populous nation, took effect on Wednesday.
The US first slapped a 25 percent tariff on India on July 30 and a week later imposed an additional 25 percent, citing New Delhi’s purchase of Russian oil.
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. Until recently, the US was India’s largest trading partner with annual bilateral trade worth $212bn.
So which industries will be hit the hardest and how will it affect US-India relations?
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”.
“There will be a huge impact,” MK Venu, founding editor of The Wire news site, told media.
“While India is not a big trading partner for the US, for India, the US is the largest trading partner,” he said, adding that exports would be affected in the areas of textiles, garments, gems and jewellery, fisheries, leather items and crafts.
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