Indian Exporters Brace for 25% US Tariffs Amid Trade Tensions

India faces significant trade disruptions as the U.S. imposes an additional 25% tariff on Indian-origin goods, raising total duties up to 50%. The move, retaliating against India's Russian oil purchases, threatens a substantial portion of India's $87 billion exports, prompting calls for financial aid and market diversification.

Indian exporters are gearing up for potential disruptions following a U.S. Homeland Security notification confirming a new 25% duty on all Indian-origin goods, set to take effect on Wednesday. The tariffs, part of a broader pressure campaign on New Delhi, will push total duties up to 50%, some of the highest levied by Washington.

The new tariffs target goods entering the U.S. beginning Wednesday at 12:01 a.m. EDT or 9:31 a.m. IST, as stated in the notification. The market reacted with the Indian rupee dropping 0.2% to 87.75 per U.S. dollar, aligning with declines in Indian equity indexes at 0.8%. Exceptions include humanitarian aid and other specific conditions.

Amid the turmoil, exporters affected by tariffs are set to receive financial assistance and governmental support for entering alternative markets such as China and Latin America. However, analysts fear the tariffs could significantly impact India's economic trajectory and corporate profits, with a potential 0.8 percentage point hit to growth this year and next.

(With inputs from agencies.)