US issues notice to hit India with 50% tariffs
The notification, issued by DHS Secretary Kristi Noem, confirmed the tariffs will apply to all Indian-origin goods entering the US for consumption
The United States formally confirmed that an additional 25% import duties on Indian goods will take effect from Wednesday, bringing the total levy to 50% as President Donald Trump’s punitive tariff regime over India’s Russian oil purchases comes into force.
The US department of homeland security (DHS) issued a formal notification on Tuesday stating the additional levy will come into force at 12.01am Eastern Daylight Time on August 27—9.31am Indian Standard Time.
The notification, issued by DHS Secretary Kristi Noem, confirmed the tariffs will apply to all Indian-origin goods entering the US for consumption, with limited exemptions for in-transit shipments that arrive by September 17 with proper certification.
To be sure, items such as electronics and pharmaceutical products remain exempted, accounting for an estimated 30-40% of India’s exports to the US by value. But how long these exemptions last is uncertain.
The benchmark BSE Sensex tumbled 849.37 points, or 1.04%, to close at 80,786.54. The 50-share NSE Nifty dropped 255.70 points, or 1.02%, to close at 24,712.05, after falling as much as 1.11%.
The rupee ended at 87.68 against the dollar, the lowest level in three weeks, against 87.58 at the previous close. It came within striking distance of its lifetime low of 87.95 hit in February.
The formal confirmation triggered warnings from export groups in India, which said that textile and apparel manufacturers — the sector hit the hardest — in major production hubs were halting operations due to deteriorating cost competitiveness.
“Textiles and apparel manufacturers in Tirupur, Noida, and Surat have halted production amid worsening cost competitiveness due to these steep duties,” said SC Ralhan, president of the Federation of Indian Export Organisations (FIEO), news agency PTI reported.
“FIEO appeals for swift, coordinated action among exporters, industry bodies, and government agencies to protect livelihoods, reinforce global trade links, and navigate this turbulent phase,” Ralhan said.
Analysis by the Global Trade Research Initiative projects India’s exports to the US will plummet from $86.5 billion in FY2025 to $49.6 billion in FY2026—a 43% decline that could endanger hundreds of thousands of jobs.
The think tank estimates that while 30% of exports worth $27.6 billion will remain duty-free and 4% covering mainly auto parts will face 25% tariffs, the bulk—66% worth $60.2 billion covering apparel, textiles, gems and jewellery, shrimp, carpets and furniture—will face the full 50% penalty.
“Exports from these sectors could plunge 70%, dropping to $18.6 billion, causing an overall 43% decline in shipments to the US and endangering hundreds of thousands of jobs,” the GTRI analysis warned.
Officials at the ministry of commerce did not respond to requests for a comment.
“The government has no hope for any immediate relief or delay in US tariffs,” a commerce ministry official who asked not to be named told Reuters.
HT reported earlier this month that the government is working on encouraging trade diversification to alternative markets. “The government has identified nearly 50 countries for increasing Indian exports, particularly of textiles, food processed items, leather goods, marine products,” an official said, asking not to be named.
The 50% tariff rate places Indian exporters at a severe disadvantage compared to competitors from Bangladesh, Vietnam, China and other Southeast Asian countries, with FIEO estimating about 55% of India’s US-bound shipments worth $47-48 billion now facing pricing disadvantages of 30-35%.
“This sector is losing ground to lower-cost rivals from Vietnam and Bangladesh,” Ralhan said, warning that labour-intensive export sectors including leather, shrimp, ceramics, chemicals, handicrafts and carpets would face sharp erosion of competitiveness.
The tariffs represent among the highest duties imposed by Washington on any trading partner. According to the DHS notification, goods already en route to the US before August 27 and arriving by September 17 with proper documentation will be exempt from the additional tariff. The notification reiterated that the action was in response to India’s “indirect support of Russia’s military incursion into Ukraine.”
India’s ministry of external affairs has termed the tariffs “unjustified and unreasonable,” while arguing that Western countries maintain extensive trade relationships with Russia.
(With inputs from Agencies in New Delhi)
