U.S. tariffs will have a 50% to 63.9% impact on many Indian goods exports: GTRI
The cumulative 50% tariffs imposed by U.S. President Donald Trump on Indian goods will take effect from now on unless there is a breakthrough in the trade agreement between the two countries.
In addition to a flat tariff of 50% on Indian goods, other most praised country (MFN) duties will apply to certain goods.
For example, clothing (knitting) will attract a 13.9% MFN tariff on a 50% tariff. Clothing (weaving) will attract a total of 60.3% tariffs, including 10.3% MFN tariffs.
In 2024-25, exports of clothing, knitted and knitted reached approximately US$5.5 billion in 2024-25, according to an analysis by the Global Trade Research Project (GTRI).
GTRI analysis points out that other Indian goods will attract more than 50% of the tariffs are diamonds, gold, related products; machinery, machinery and equipment; steel, aluminum, copper; textiles; organic chemicals; carpets; furniture, bedding, mattresses. The effective tariff range for these commodities is between 51-59%.
Smartphones, medicines and petroleum products will have tariff exemptions. However, exports of petroleum products will attract a 6.9% MFN tariff.
India and the United States have been negotiating temporary trade agreements over the past few months, but India has reservations about the need for the open agriculture and dairy sectors. Agriculture and dairy products are crucial to India as these two sectors provide livelihood opportunities for most people.
Initially, President Trump announced a 25% tariff on Indian goods as well as unspecified fines, even with the hope of a temporary India-U.S. trade agreement that would otherwise have helped avoid tariff hikes. A few days later, he imposed an additional 25% tariff, a total of 50% over India’s import of Russian oil.
India and the United States began talks in March this year on a fair, balanced and mutually beneficial Bilateral Trade Agreement (BTA) aimed at completing the first phase of the agreement from October to November 2025.
On April 2, 2025, President Trump signed an executive order to impose various tariffs on various trading partners, leveraging various tariffs on 10% to 50%.
He then kept the tariffs for 90 days while imposing a 10% benchmark tariff. The deadline ended on July 9, and the U.S. government then pushed it to August 1.
At the ongoing parliamentary monsoon meeting, Commerce and Industry Minister Piyush Goyal issued a statement in the two homes confirming that the government is reviewing the impact of tariffs and will take all necessary steps to safeguard national interests.
