Indian exporters will face US tariffs of up to 50 percent as the Trump administration’s imposition of the highest levy comes into effect from today, Indian government sources said on Wednesday, August 27. These tariffs do not cover Indian steel exports that are already subject to Section 232 duties of 50 percent.
The highest level of the tariffs imposed by the US administration comes in the wake of the collapse of trade talks between the two countries after a scheduled meeting earlier this month on a trade agreement was called off, heightening tensions, the sources said.
Earlier, five rounds of Indo-US trade talks aimed to cap the additional US tariffs at 15 percent for India. However, the Trump administration imposed a new punitive 25 percent tariff on India over its purchase of Russian crude oil, accusing the country of indirectly funding Russia’s war in Ukraine. Consequently, the total tariff on Indian imports has been raised to 50 percent, combining the existing 25 percent duty with the new punitive tariff.
“The Indian government has no hope of any relief on the tariff front from the US. The 50 percent tariff is practically a trade embargo between the two countries,” an Indian official said.
However, on Tuesday, the US State Department and India's Ministry of External Affairs issued identical statements saying senior officials of the ministries and defence departments met virtually on Monday and expressed "eagerness to continue enhancing the breadth and depth of the bilateral relationship".
Organisations representing exporters estimate that the tariff could affect nearly 55 percent of India's merchandise exports worth $87 billion to the US, while benefiting competitors such as Bangladesh, China and Vietnam.