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Crippling US Tariffs Threaten to Decimate India's Key Exports
26 Aug
Summary
- 50% tariff on Indian goods entering US effective August 27, 2025
- Impacts over $60 billion in exports, including textiles, gems, shrimp
- Puts hundreds of thousands of jobs at risk in India's export hubs
On August 27, 2025, a crippling 50% tariff will take effect on over $60 billion worth of Indian exports to the United States, severely impacting critical labor-intensive sectors such as textiles, gems and jewellery, and shrimp. This marks one of the most severe trade shocks India has faced in recent years, as the US moves to impose prohibitive duties on two-thirds of India's $86.5 billion in annual exports to the country.
The steep tariffs are expected to drive a 43% decline in India's overall shipments to the US, with exports from affected sectors potentially plunging by as much as 70%. This strategic move by Washington risks mass unemployment in India's export hubs and threatens to weaken the country's long-standing foothold in US labor-intensive markets. Competitors like China, Vietnam, and Mexico stand to gain as India faces the prospect of being locked out of key markets even after the tariffs are eventually rolled back.
Exporters warn that the "prohibitive" duties will force many Indian goods out of the US market, as major rivals enjoy much lower tariffs. Certain firms are already front-loading consignments to America before the increased levies take effect, as reflected in July's trade data which showed a 19.94% surge in India's goods exports to the US.
