US Tensions Escalate: Steep Tariffs Loom Over Indian Exports

A looming 50% tariff by the US on Indian goods threatens trade dynamics unless a deal is reached. Key sectors affected include apparel and machinery, while talks continue for a fair Bilateral Trade Agreement. The potential impact on Indian livelihoods and economic interests remains a focus for officials.

The United States is set to impose a cumulative 50% tariff on Indian goods in two weeks unless a trade agreement is reached. This move follows President Donald Trump's announcement, with apparel, particularly knitted and woven, facing additional most-favoured nation (MFN) duties of up to 13.9%.

The Global Trade Research Initiative (GTRI) estimates that India's apparel exports to the U.S., valued at approximately $5.5 billion for the fiscal year 2024-25, will be heavily impacted. Other sectors, including diamonds, machinery, and organic chemicals, face tariffs between 51-59%. Exemptions apply to certain goods like smartphones and pharmaceuticals, but petroleum products will see a 6.9% MFN tariff.

Negotiations for a Bilateral Trade Agreement began in March 2025, facing hurdles mainly due to U.S. demands on India's agriculture and dairy sectors. These talks aim to form a balanced agreement by late 2025. Meanwhile, Commerce Minister Piyush Goyal assures that India will protect its national interests amid these tariff challenges.