U.S. President Donald Trump’s announcement of a 25 percent additional tariff on Indian goods—made earlier on August 6—will officially come into effect. On Tuesday, the U.S. Department of Homeland Security issued a notification, confirming that India would receive no relief from these tariffs.
The move comes in response to India’s continued oil trade with Russia, which the U.S. claims is indirectly fueling Russia’s military operations in Ukraine. This follows an earlier 25 percent tariff imposed over trade imbalance, bringing the total tariff burden on Indian exports to 50 percent, effective August 27. In today’s DNA episode, Rahul Sinha, Managing Editor of Zee News, analysed the effects of US tariffs on India:
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#DNAWithRahulSinha | ट्रंप का 50% टैरिफ..कल से लागू हो रहा है, 50% टैरिफ से क्या सस्ता, क्या महंगा?
50% टैरिफ के ‘असर’ का सरल विश्लेषण #DNA #UnitedStates #DonaldTrump #USTariff #TariffWar @RahulSinhaTV pic.twitter.com/AZCsWy1pyh
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Affects On Garment Industry
India’s garment sector, which exports Rs. 83,000 crore worth of goods annually to the U.S., is among the hardest hit. The tax rate on garments has jumped from 13.9 percent to 63.9 percent, leading to an expected 50-70 percent drop in exports, potentially causing losses of up to Rs. 60,000 crore.
Price comparisons with competitors reveal the challenge: A t-shirt costing Rs. 1500 from India will face tough competition from similar products priced at Rs. 1300 (China), Rs. 1200 (Bangladesh), and Rs. 1145 (Vietnam). As a result, U.S. demand for Indian garments is projected to fall sharply, threatening 34 percent of India’s global garment exports, which are currently U.S.-bound.
In Tiruppur, Tamil Nadu, a major export hub, the impact is already visible:
– Orders are on hold
– Machines are idle
– 250 new workers have been sidelined
– Thousands of jobs may be at risk in the coming months
Jewellery Sector Sees Orders Cancelled?
India’s jewellery exports, valued at 10 billion dollars (Rs. 83,000 crore) annually to the U.S., are now subject to a 52.1 percent tariff, up from just 2.1 percent. As a result:
– Exports are expected to drop by 50 percent
– Estimated losses range between Rs. 50,000–60,000 crore
Shrimp Exports Hit with 60 Percent Tax
Trump’s tariffs have also struck India’s seafood sector, particularly shrimp exports, valued at Rs. 16,000 crore. Key points:
Previously untaxed, shrimp exports now face a 50 percent tariff + 10 percent countervailing duty
– This totals 60 percent in duties
– Export decline estimated at 60 percent, with losses of around Rs. 8,300 crore
Around 5 lakh farmers and 25 lakh others will be directly or indirectly affected. Production has fallen from 100 million to 60–70 million units. Farmers are considering shifting to alternative agriculture.
Other Affected Industries
Several other industries face significant setbacks due to the 50 percent tariff:
Industry And Estimated Loss
Chemicals and Organics- Rs. 74,000 crore
Machinery and Engineering- Rs. 24,900 crore
Furniture- Rs. 9,000 crore
Leather and Footwear- Rs. 8,300 crore
The chemical sector, employing 20 lakh people, is seeing major export orders put on hold.
No Tariff on Strategic Sectors
Trump’s administration excluded certain key sectors from the tariff hike, including:
1- Pharmaceuticals – U.S. depends on India’s low-cost generics
2- IT Services – Crucial for U.S. tech supply chain
3- Smartphones – Apple struck a 100 billion dollars investment deal with the U.S.
4- Energy and Petroleum Products – Tied to national security and green tech
