US imposes tariffs against India over Russian oil purchases
27 August 09:22
US President Donald Trump has imposed doubled tariffs on Indian goods, which now reach 50%. This decision came into force today at seven in the morning Kiev time, "Komersant Ukrainian" reports with reference to Reuters.
The main reason for the increase in tariffs was India’s purchases of Russian oil. For this, the US imposed additional punitive duties of 25%, which added to the already existing 25% tariffs on many Indian goods.
How this will affect India
Exporters of apparel, jewelry, footwear, sporting goods, furniture and chemicals will be hit the hardest. Total duties on these categories have reached 50% – one of the highest levels the US applies to any country, next to tariffs on goods from Brazil and China.
The new trade barriers pose a serious threat to thousands of small exporters and jobs in India. The state of Gujarat, the home of Prime Minister Narendra Modi, where many exporting businesses are concentrated, will be particularly affected.
Export groups estimate that the tariff hike could affect nearly 55% of India’s total $87 billion in merchandise exports to the US. This will create competitive disadvantages for Vietnam, Bangladesh and China.
Prolonged high tariffs could undermine India’s growing attractiveness as an alternative manufacturing center to China, especially in the areas of smartphones and electronics. This threatens India’s strategic plans.
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India is not looking for a compromise
Five rounds of talks to avoid tariff hikes have ended in failure, and current signals from India indicate that it is not going to seek a compromise with the Trump administration.
India’s commerce ministry plans to provide financial assistance to affected exporters and encourage them to diversify their markets. Indian companies should refocus on China, Latin America and the Middle East.
However, despite the trade disputes, both countries reiterated their willingness to develop strategic security partnerships and continue to cooperate in the Quad alliance along with Australia and Japan.
The US Customs Service has granted a three-week extension for Indian goods that are already in transit to the US. Such shipments can enter the country at the old, lower tariff rates until September 17.
Bilateral trade in goods between the U.S. and India totaled $129 billion in 2024, with a trade deficit for the U.S. of $45.8 billion.
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