U.S. President Donald Trump’s decision to impose a 50% tariff on Indian exports has officially taken effect from August 27, 2025, doubling the earlier 25% levy. The new tariff applies to a wide range of products, including textiles, apparel, gems, footwear, furniture, and chemicals.
The move has been framed as a penalty for India’s continued purchase of Russian oil.
The Indian Ministry of External Affairs has strongly condemned the measure, calling it “unfair, unjustified and unreasonable.” The tariffs are expected to hit India’s economy hard, with analysts warning of billions of dollars in trade losses and significant pressure on industries such as textiles, gems, and seafood. The textile and apparel sector in particular could see export volumes to the U.
S. decline by as much as 40–50%, with losses estimated at $2.5–3 billion.
Major textile hubs like Surat and Ahmedabad in Gujarat are expected to be among the hardest hit, as local exporters fear that U.S. trade has become “impossible” under the new duties. Industry bodies, including the Confederation of Indian Textile Industry (CITI), have urged urgent government intervention, calling for support schemes, incentives, and stronger policies to safeguard competitiveness.
In response, the Indian government is reportedly adopting a multi-pronged strategy, which includes providing financial assistance to exporters, diversifying markets beyond the U.S. to regions such as Africa, Latin America, and the EU, and pursuing diplomatic channels to seek relief or exemptions. Despite the trade shock, some economists argue that India’s larger economy may remain resilient due to strong domestic consumption and growth in premium markets.
Beyond the economic impact, the decision risks a broader diplomatic fallout between the U.S. and India. Reports suggest that the tariffs could spill over into other areas of cooperation, including defense procurements and multilateral forums such as the Quad. For now, however, the focus remains on cushioning the blow to India’s critical export sectors, with industry leaders and policymakers scrambling to mitigate the disruption.
