Editor’s Note
This article examines the potential economic fallout for India as U.S. tariffs on its exports are set to double, a move analysts warn could severely disrupt trade. The situation underscores the complex geopolitical and economic consequences of global energy alliances.
Indian exporters could hardly have imagined a worse scenario. Due to New Delhi’s purchases of Russian oil, the customs barriers imposed on the South Asian giant by the United States, already set at 25% since August 7, are expected to double starting Wednesday, August 27, reaching 50%.
The measure, which economists at Nomura Holdings compare to a “trade embargo,” could lead to a sudden halt in certain exports and prove costly for the world’s fifth-largest economy. The Indian central bank currently forecasts 6.5% growth for 2026, but the overall impact of the tariffs on gross domestic product could reach about 1%, according to Bloomberg Economics.
The United States is the primary destination for Indian merchandise exports, and many small businesses may not recover from the blow dealt by U.S. President Donald Trump. Labor-intensive sectors such as textiles, leather, gemstones and jewelry, and seafood are on the front line.