India expects a major hit to $64 billion worth of exports to the US due to President Trump’s new tariffs and penalties. The tariffs include a 25% tax on Indian goods and a possible 10% penalty for buying Russian oil, according to an internal government report. These measures risk weakening India’s price competitiveness against other countries with lower tariffs.
India’s exports to the US make up about 80% of its total shipments to America, including garments, pharmaceuticals, gems, jewellery, and petrochemicals. Despite this, the impact on India’s overall $4 trillion economy is expected to be modest, reducing growth by about 0.4%. The Reserve Bank of India has kept its growth forecast steady at 6.5% for the current financial year.
The US is also pressuring India to reduce its purchases of Russian crude oil amid the ongoing Ukraine conflict. India’s National Security Adviser Ajit Doval is currently in Russia to discuss energy purchases and defence cooperation, including expedited delivery of the S-400 missile system. Foreign Minister Jaishankar will follow up in coming weeks.
This situation has created a diplomatic strain between India and the US, with New Delhi trying to balance its strong historical ties with Moscow while addressing Washington’s concerns. The Indian government is actively engaging in trade talks with the US to manage the fallout from these tariffs and penalties.
India’s trade ministry has not yet commented publicly, and the internal report’s estimates may change as more details emerge. Meanwhile, India continues to face challenges in maintaining its export competitiveness amid increasing global trade tensions.