U.S. Slaps 50% Tariff on Indian Exports, Triggering Diplomatic and Economic Shockwaves

New Delhi, Aug 28:

The United States has officially imposed a 50% tariff on a wide range of Indian exports, escalating tensions between the two countries and sending ripples through global trade. The measure, which took effect on August 27, 2025, doubles the earlier 25% tariff and is seen as a direct response to India’s continued purchases of Russian oil.

The new tariff regime hits some of India’s most vital export sectors—textiles, apparel, gems and jewelry, shrimp, carpets, furniture, footwear, and chemicals—covering nearly two-thirds of India’s $86–87 billion shipments to the U.S. Economists warn that exports in these categories could slump by as much as 43–70%, with the potential to shave 0.8–1 percentage point off India’s GDP growth.

The Indian government has pledged financial aid and relief measures for affected exporters while urging industries to diversify into alternative markets across Europe, Latin America, Africa, and the Middle East. Yet the move has already sparked political backlash at home. The Congress party slammed the government for failing to cushion the blow, while yoga guru Baba Ramdev called for a nationwide boycott of U.S. products, declaring that “no Indian should be seen at the counters of American brands.”

The tariff shock has also rattled India’s markets: the rupee slid to record lows, and stock indices registered sharp declines on fears of a prolonged trade conflict.

In Washington, the move has drawn domestic criticism as well. Several lawmakers, particularly Democrats, questioned why India alone was targeted, while other major buyers of Russian oil—including China—escaped similar punitive measures. Analysts caution that the decision could damage years of strategic trust built between the two countries, especially in defense cooperation and the Quad security framework.

Despite the heightened rhetoric, there are faint signs of hope. U.S. Treasury Secretary Scott Bessent said he believed both nations would “come together” in the long run, hinting at a possible diplomatic reset.

For now, however, the tariffs have cast a shadow over one of the world’s fastest-growing trade partnerships, leaving businesses, policymakers, and consumers bracing for uncertain days ahead.