Editor’s Note
The U.S. has formally enacted 25% additional tariffs on India, prompting a renewed push from New Delhi for economic self-reliance and domestic consumption.
The U.S. government has issued an official notification implementing the 25% additional duties imposed on India. The U.S. Department of Homeland Security (DHS) uploaded a notification regarding the new tariffs. Meanwhile, the Indian government is emphasizing the ‘self-reliance’ mantra to reduce the economy’s dependence on exports. On Tuesday, Prime Minister Narendra Modi called on Indians to “be vocal for local” and buy Indian goods.
According to a report by The Indian Express, textile and apparel manufacturers in Tiruppur, Noida, and Surat have halted production due to a decline in cost competitiveness caused by the additional tariffs.
Due to the U.S. tariffs, Indian exporters are bracing for a significant drop in their trade with the United States. Initial estimates suggest that a 50% tariff rate will apply to products worth over $47 billion. This includes the 25% tariff imposed on Indian imports from August 7th and an additional 25% punitive tariff on India’s oil imports from Russia.
Currently, this duty is 25%. In addition, duties applicable before the reciprocal tariffs will also be levied. For example, carpet exports previously faced only a 2.9% duty in the U.S. market before April, which will now become 52.9%.
This massive increase in tariffs will make Indian goods significantly more expensive in the U.S. market, affecting $30-35 billion of India’s exports. Exports primarily of marine products, especially shrimp, organic chemicals, apparel, textile made-ups, diamonds and gold jewelry, machinery and mechanical appliances, and items like furniture and beds will be impacted.
Exports of pharmaceuticals, smartphones and other electronics, and petroleum products have been exempted from the 50% duty. The U.S. wants to secure completely duty-free access for the Indian market in sectors like agriculture, dairy, and fisheries.
Exporters in Tiruppur, Tamil Nadu, could face large-scale job cuts, factory closures, and losses amounting to several thousand crore rupees. This industrial city accounts for nearly 68% of India’s total knitwear exports and employs about one million people. Reports suggest they could lose approximately 150,000 jobs and ₹12,000 crore in revenue.
Shrimp – 60%
Carpets – 52.9%
Knit Apparel – 63.9%
Woven Apparel – 60.3%
Textile Made-ups – 59%
Diamond & Gold Items – 52.1%
Machinery – 51.3%
Furniture & Beds – 52.3%
