US President Donald Trump has announced a major hike in import duties on goods coming from India. Starting August 1, Indian products will face an extra 25 percent tax when they are brought into the US. This is in addition to an earlier 10 percent duty imposed in April. The decision is said to be a reaction to India’s purchase of oil and military equipment from Russia.
The announcement has come as a surprise because India and the US are currently in the middle of trade talks. Now, the new duties are expected to make Indian goods more expensive in the US, possibly reducing their demand.
Which Products Will Be Affected?
India already faces high US tariffs on many items:
- Steel and aluminium: 50% duty
- Auto parts: 25% duty
Now, with the new 25% hike, duties on some key Indian exports will be: - Textiles and garments: up from 6–9% to 31–34%
- Telecom products: 25%
- Jewellery and gems: could reach up to 38.5%
- Food and agriculture items: around 30%
- Leather, footwear, carpets, and handicrafts: may also see sharp price hikes
There’s also mention of an unspecified penalty, which could raise costs even further.
Why Is the US Doing This?
The US says that India:
- Imposes high tariffs on American products
- Has a trade surplus with the US — meaning India exports much more to the US than it imports
In 2024–25, total India–US trade was worth $186 billion:
- India exported $86.5 billion worth of goods to the US
- India imported $45.3 billion worth of goods from the US
This gave India a $41 billion surplus in goods, plus another $3.2 billion surplus in services
However, the Indian think tank GTRI argues that when you include US earnings from education, tech services, royalties, weapons sales, and other sectors, the US actually has a $35–40 billion overall surplus in its trade with India.
What Does This Mean for Indian Businesses?
Indian exporters, especially those dealing in clothing, leather products, jewellery, and handicrafts, may find it harder to compete in the US market. The higher costs caused by tariffs will likely be passed on to American consumers, making Indian products less attractive.
Are India’s Tariffs Really That High?
Yes, India’s average import tariff is around 17%, higher than the US average of 3.3%. But this is similar to countries like China and South Korea. Also, the US also has high tariffs on many items, such as:
- Dairy products: up to 188%
- Cereals: 193%
- Beverages: 150%
- Minerals: 187%
This shows that both countries protect their markets in different ways.
