America has announced to impose an additional 50 percent import duty on indian products, which will come into effect from august 27, 2025. This decision will affect more than $60 billion of India's $86 billion exports. Its biggest impact will be on labor-intensive sectors like shrimp, apparel, leather and gems and jewelery.
This will have a direct blow to the apparel sector, as it exports $10.3 billion. This is also a big blow to the gems and jewelery sector, as America is the largest market for this industry. Many exporters believe that job cuts in these sectors are certain.
Many sectors affected by Trump's high tariff
Shrimp and seafood exports will also be severely affected. The leather and footwear industry may have to stop production and reduce the number of employees. At the same time, competition will also weaken in sectors like carpet and furniture.
According to the report of the Global Trade Research Initiative (GTRI), US tariffs will affect about 66 percent of India's exports to the US. From august 27(today), 50 percent duty will be imposed on products worth $ 60.2 billion, including textiles, gems and shrimp.
What will be the effect of the increase in US tariffs?
Ajay Srivastava, co-founder of the institute, said that this is the biggest trade setback for india in recent years. According to him, India's exports to the US may come down to around $ 49.6 billion in the financial year 2025-26. This decision will benefit competing countries like China, Vietnam, Mexico, turkey and even Pakistan, nepal and Kenya.
It is worth noting that the US has imposed an additional 25 percent tariff on india for buying oil from russia during the ukraine War. Whereas 25 percent tariff is already imposed. In such a situation, the total tariff rates will increase to 50 percent from Wednesday. This is the biggest economic restriction of this kind on New delhi in recent years.
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