US Imposes 50% Tariff on Indian Exports - Over 55% of Goods Affected

In a major blow to India’s export economy the United States has imposed a steep 50% tariff on Indian exports, disrupting over 55% of India’s trade with the US, its largest export market. This move significantly escalates US-India trade tensions, marking the worst diplomatic and economic standoff in over 20 years.

The US tariff hike impacts critical Indian industries like textiles, gems and jewellery, leather goods, automobile components and seafood—sectors that together make up a major chunk of India’s $87 billion annual exports to America. With these high US import duties, Indian exporters now face a 30–35% cost disadvantage compared to countries like Vietnam, Bangladesh, and Cambodia, who enjoy much lower US tariff rates.

Washington links the tariff decision to India’s growing reliance on discounted Russian crude oil, which the US claims is indirectly funding Russia’s war in Ukraine. Prior to 2022, Russia barely accounted for 0.2% of India’s oil imports. Now, Russia is India’s largest oil supplier with India importing 1.6 million barrels per day from Moscow in July 2025—nearly one-third of its total imports.

After the latest hike, India joins Brazil as the country facing the highest US import tariffs (50%), while rivals like Bangladesh (35%), Vietnam (20%) and Malaysia (25%) remain far more competitive. This could cause a massive trade diversion away from Indian suppliers.

The tariff announcement comes just weeks before the sixth round of bilateral trade agreement (BTA) negotiations between India and the US, scheduled for August 25, 2025. Analysts warn that this tariff escalation could derail future trade deals and further strain diplomatic ties between the world’s two largest democracies.