The imposed 50% tariff on Indian goods by the US recently took effect: the 25% levy slapped on July 30 and another 25% a week later. Estimates say roughly two-thirds of exports are hit and India’s US shipments could fall around 42% by 2026.
The new top rate covers gems and jewellery, garments, footwear, furniture and industrial chemicals. US–India trade totaled $212 billion last year.
Global Trade Research Initiative flags textiles, gems, jewellery, shrimp and carpets as worst-hit, warning of a “70% collapse in exports,” endangering “hundreds of thousands of jobs.” Category specifics include jewellery where tariffs rise to 52.1% from 2.1%, and shrimp where total duties jump to 60% from a 0% MFN rate.
Handicrafts exported at $1.6 billion and furniture & bedding at $1.1 billion also face pressure, alongside leather and footwear at $1.2 billion.
Pharmaceuticals are exempt for now, keeping around $8.7 billion of pharma products India supplied safe—roughly half of US generic drug imports in 2024. Semiconductors and consumer electronics fall under separate sector-specific US tariffs, as do aluminium, steel, and passenger vehicles—so the blanket 50% rate does not directly apply there.
New Delhi’s mitigation playbook stresses self-reliance, tax relief and support for exporters.
“India should become self-reliant… Economic selfishness is on the rise globally,” Prime Minister Narendra Modi said, pledging to protect farmers, cut taxes and provide assistance to diversify toward Latin America and the Middle East.
The White House ties the move to India’s purchases of Russian crude. Estimates said imports rose from 1% pre-war to 37%, accusing New Delhi of “profiteering.”
India’s foreign ministry said it will “take all necessary steps to protect its national interests,” arguing oil buys are driven by market forces and the needs of 1.4 billion people.
Economists peg the drag near 0.9–1.0% of GDP (about $36 billion), warning frictions could push India to rebalance toward BRICS partners.
Information for this briefing was found via AlJazeera and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
