Indian exports worth USD 48 billion face setback as 50% US tariffs begin today

The United States has started imposing higher tariffs on Indian goods, a move that is expected to hit India’s exports worth more than USD 48 billion. From August 27, 2025, 9:31 am IST, Indian goods entering the US will face an additional 25% tariff, taking the total duty to 50% on most items.

The US government announced that the decision was taken as a penalty for India’s continued purchases of Russian crude oil and military equipment. Earlier, on August 7, Washington had already imposed a 25% duty. Now, with the second round of tariffs, Indian exporters are bracing for one of the biggest trade shocks in years.

Which goods are affected and which are exempt

According to the US Department of Homeland Security, the increased tariffs will apply to all Indian goods “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am EST on August 27, 2025.”

This means that any Indian products arriving in the US after this deadline will face a 50% import duty, unless they fall under specific exemptions.

Goods will not face the new tariffs if:

• They were already shipped before the deadline and are still in transit to the US.

• They are cleared by US Customs before September 17, 2025.

• Importers provide a special exemption code to US authorities when filing paperwork.

The US has applied this harsh measure only to India and Brazil, making them the two countries facing the highest import duties.

Some important Indian export sectors will not be affected, including pharmaceuticals, energy products, and electronics. These industries will continue to trade with the US without the added costs.

Indian sectors most affected by the new tariffs

The new import duties will hit several labour-intensive industries that depend heavily on exports to the US. Many of these sectors employ millions of workers across India and contribute significantly to the economy.

Here are the sectors under most pressure:

• Textiles and clothing – worth USD 10.8 billion; regions like Tirupur, Bengaluru, and NCR will see lower demand.

• Gems and jewellery – worth USD 10 billion; cities like Surat and Mumbai may face job losses.

• Shrimp exports – worth USD 2.4 billion; farms in Visakhapatnam will suffer.

• Leather and footwear – smaller producers will lose competitiveness.

• Animal products and chemicals – already low-margin exports will become costlier in the US market.

• Machinery and equipment – worth USD 6.7 billion; could see reduced demand.

• Carpets and handicrafts – together worth USD 2.8 billion; will lose ground to cheaper suppliers from Turkey and Vietnam.

In addition, agri-food products like basmati rice, spices, and tea, worth nearly USD 6 billion, may lose out to competitors such as Pakistan and Thailand, who do not face such high tariffs.

Exports of steel, aluminium, copper (USD 4.7 billion) and organic chemicals (USD 2.7 billion) are also on the list of affected goods.

The bigger picture: How much trade is impacted

India exported goods worth nearly USD 73 billion to the US in 2024. Of this, according to estimates by think tank GTRI, about 66% (USD 60.2 billion) will now face a 50% duty.

This includes high-value exports like apparel, textiles, gems and jewellery, shrimp, carpets, and furniture. These products will become much more expensive in the US market, reducing their competitiveness compared to products from other countries.

Another 3.8% of exports (USD 3.4 billion)—mainly auto components—will face a 25% tariff.
The remaining 30.2% of exports (USD 27.6 billion), such as medicines and some electronics, will still enter the US duty-free.

This mixed picture shows that while India’s strong pharmaceutical exports are safe, most labour-heavy and traditional sectors are under serious threat.

Impact on workers and local economies

The sudden tariff hike is expected to hurt not just exporters but also millions of workers in India. Key regional economies could face large disruptions:

• Surat and Mumbai – where thousands of workers in diamond polishing and jewellery making depend on exports to the US.

• Tirupur (Tamil Nadu) – the hub of India’s garment industry, which relies heavily on the US market.

• Visakhapatnam (Andhra Pradesh) – where shrimp farms supply to American consumers.

• Kashmir and Uttar Pradesh – famous for carpets and handicrafts, which will now lose competitiveness to other countries.

Experts warn that these sectors could lose significant orders in the coming months, leading to reduced production and possible layoffs.

ALSO READ: PM Modi’s vision sparks a new era in India’s space journey

ALSO READ: Why the UN declaring a famine in Gaza holds critical global importance | Explained

The new US tariffs mark a serious escalation in trade tensions between New Delhi and Washington. With Indian exports worth USD 48 billion now facing heavy duties, the move could reshape India’s trade pattern with its largest export market.

While pharmaceuticals and electronics are safe, sectors like textiles, jewellery, and seafood—employing millions of Indians—are at risk of losing ground to global competitors.

For now, both businesses and workers across India will have to brace for the difficult weeks ahead as the impact of these tariffs becomes clearer.