US Imposes Additional 25% Tariff on Indian Goods, Total Now 50%
The United States has increased tariffs on Indian goods by an additional 25%, bringing the total to 50% on most Indian exports. This action is reportedly in response to India's continued purchase of Russian oil. The Federation of Indian Export Organisations (FIEO) warns this will affect 55% of India's exports to America, creating a 30-35% competitive disadvantage for Indian exporters. Sectors like textiles, marine, and leather exports are expected to be significantly impacted. The India-US bilateral trade currently stands at ₹10.96 lakh crore ($131.8 billion), with exports at ₹7.19 lakh crore ($86.5 billion) and imports at ₹3.77 lakh crore ($45.3 billion). The new tariff rate puts India at a disadvantage compared to competitors like Bangladesh (35% tariff) and Thailand (36% tariff). Many export orders have been put on hold, and buyers are reassessing their sourcing decisions due to higher costs.
*this image is generated using AI for illustrative purposes only.
The United States has imposed an additional 25% tariff on Indian goods, bringing the total tariff to a substantial 50% on most Indian exports. This move comes as a penalty for India's continued purchase of Russian oil, according to recent reports.
Impact on Indian Exports
The Federation of Indian Export Organisations (FIEO) has stated that this tariff hike will have far-reaching consequences:
- It will affect 55% of India's exports to America
- Create a 30-35% competitive disadvantage for Indian exporters compared to other countries
- Sectors like textiles, marine, and leather exports are expected to be hit hard
Current Trade Scenario
- India-US bilateral trade stood at ₹10.96 lakh crore ($131.8 billion)
- Exports: ₹7.19 lakh crore ($86.5 billion)
- Imports: ₹3.77 lakh crore ($45.3 billion)
Tariff Comparison
The new tariff rate puts India in a challenging position compared to its competitors:
| Country | US Tariff Rate |
|---|---|
| India | 50% |
| Brazil | 50% |
| Myanmar | 40% |
| Thailand | 36% |
| Cambodia | 36% |
| Bangladesh | 35% |
| Others | 20-32% |
Market Reaction
The impact of this tariff increase is already being felt in the export market:
- Many export orders have been put on hold
- Buyers are reassessing their sourcing decisions due to higher costs
This development poses significant challenges for Indian exporters, potentially reshaping trade dynamics between India and the United States. The situation remains fluid as businesses and policymakers grapple with the implications of this substantial tariff increase.
17
