US 50% Tariffs on Indian Goods: No Cause For Panic, Impact Unlikely To Be Severe - Report

Mangalore Today News Network

New Delhi, Aug 27, 2025: The United States on Wednesday imposed a steep 50 percent tariff on a wide range of Indian products, doubling the existing duty in what President Donald Trump described as a move to penalise New Delhi for continuing oil purchases from Russia.

Government sources, however, urged calm, saying the impact was unlikely to be as severe as initially feared given the “diversified nature” of Indian exports. “This is a temporary phase in a long-term relationship,” sources told news agency PTI.

The tariffs took effect hours after US Treasury Secretary Scott Bessent told Fox Business that President Trump maintained “good ties” with Prime Minister Narendra Modi and expressed optimism about future negotiations. “I think at the end of the day, we will come together,” he said.

While Trump has imposed fresh duties on both allies and rivals since returning to office in January, the 50-percent levy is among the harshest faced by a US trading partner. The move is aimed at pressuring India to scale back energy transactions with Moscow, a critical source of revenue for Russia’s war in Ukraine.

The United States was India’s largest export destination in 2024, with shipments worth $87.3 billion. Trade experts have warned that such a high tariff could function like a de facto embargo, hitting small and medium exporters the hardest.

Ajay Sahai, Director General of the Federation of Indian Export Organisations, sought urgent government support. “We want to ensure that even if business stops, we are able to keep workers on the payroll,” he said, while expressing optimism about trade talks.

New Delhi has criticised the levies as “unfair, unjustified and unreasonable.” Economists argue that India should use the challenge to accelerate the Make in India 2.0 push, strengthen supply chains, and diversify markets.

Despite the tensions, India’s economy remains on a strong footing. An SBI Research report last week projected GDP growth of 6.8–7 percent in Q1 FY26, with gross value added (GVA) estimated at 6.5 percent, driven by robust discretionary spending.