Trump’s 50% Tariffs on Indian Imports Take Effect, Raising Bilateral Tensions

Washington/New Delhi, Aug 27 (Reuters) - U.S. President Donald Trump’s decision to double tariffs on a wide range of Indian goods to as much as 50 percent took effect today, intensifying friction between the world’s two largest democracies and strategic partners.

The additional punitive 25 percent duty, imposed in response to India’s continued purchases of Russian oil, compounds a previous 25 percent tariff on items such as clothing, gems and jewellery, footwear, sporting equipment, furniture and chemicals. Products already en route to U.S. ports before midnight Tuesday retain the lower rate until Sept. 17 if properly certified.

An official notice from U.S. Customs and Border Protection confirmed that all eligible imports “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Daylight Time on August 27, 2025, will be subject to the additional ad valorem rate of duty.” Exemptions remain for steel, aluminum, passenger vehicles, copper products, humanitarian donations and informational materials.

New Delhi denounced the move as “unfair, unjustified and unreasonable,” and Prime Minister Narendra Modi pledged that the government will safeguard the interests of farmers, small businesses and dairy producers unaffected by external pressure. Anonymized Commerce Ministry sources said exporters hit by the levies will receive financial support and be encouraged to pivot to markets in China, Latin America and the Middle East.

Ridhi Rao, senior economist at DBS Bank, warned that while exports to the U.S. represent just 0.3 percent of India’s GDP, the steep levies could unevenly depress growth across labour-intensive sectors and influence Reserve Bank of India policy on credit and liquidity. “Pursuing alternative markets and bolstering trade agreements will be crucial,” she said.

Jesari Supta, associate professor at the Indian Institute for Development Research, urged a shift toward free-trade pacts and tariff reductions to stimulate demand and foreign investment. Barclays’ chief economist in India estimated that up to 70 percent of India’s $55 billion in U.S.-bound exports are now at significant risk, potentially eroding the country’s role as a manufacturing hub alternative to China.

Despite the standoff, officials from both nations reaffirmed during a recent virtual dialogue their commitment to cooperation on defence, energy security and the Quad partnership, underscoring the complexity of U.S.-India relations amid escalating trade disputes.