Trump's doubling of tariffs on Indian imports takes effect, hiking tensions

Highlights

• Additional 25% tariff imposed as punishment for India buying Russian oil
• Tariffs of up to 50% threaten Indian exporters and jobs
• Failed talks blamed on political misjudgment, missed signals
• US, India seek to highlight security partnership

US President Donald Trump's doubling of tariffs on goods from India to as much as 50% took effect as scheduled on Wednesday, escalating tensions between the world's two largest democracies and strategic partners.

A punitive 25% tariff imposed due to India's purchases of Russian oil adds to Trump's prior 25% tariff on many products from India.

It takes total duties to as high as 50% for goods such as garments, gems and jewellery, footwear, sporting goods, furniture and chemicals - among the highest imposed by the US and on par with Brazil and China.

The new tariffs threaten thousands of small exporters and jobs, including Indian Prime Minister Narendra Modi's home state of Gujarat.

An Indian Commerce Ministry official said on condition of anonymity that exporters hit by tariffs would receive financial assistance and be encouraged to diversify to markets such as China, Latin America and the Middle East.

A US Customs and Border Protection notice to shippers provides a three-week exemption for Indian goods that were loaded onto a vessel and in transit to the US before the midnight deadline. These goods can still enter the US at prior lower tariff rates before 12:01 a.m. EDT (0401 GMT) on September 17.

Also exempted are steel, aluminum and derivative products, passenger vehicles, copper and other goods subject to separate tariffs of up to 50% under the Section 232 national security trade law.

India trade ministry officials say the average tariff on US imports is around 7.5%, while the US Trade Representative's office has highlighted rates of up to 100% on autos and an average applied tariff rate of 39% on US farm goods.

The chart shows India's monthly imports and export to US

FAILED TALKS

As the midnight activation deadline approached, US officials offered no hope for India to avert the tariffs.

"Yeah," said White House trade adviser Peter Navarro when asked if the increased tariffs on India's US -bound exports would go into effect as previously announced on Wednesday. He offered no further details.

Wednesday's tariff move follows five rounds of failed talks, during which Indian officials had signalled optimism that US tariffs could be capped at 15%, the rate granted to goods from some other major US trade partners including Japan, South Korea and the European Union.

US stocks ended slightly higher on Tuesday, with the Dow adding three-tenths of a percent, and the S&P 500 and Nasdaq each gaining about four-tenths of a percent.

Officials on both sides blamed political misjudgment and missed signals for the breakdown in talks between the world's biggest and fifth-largest economies. Their two-way goods trade totaled $129 billion in 2024, with a $45.8 billion US trade deficit, according to US Census Bureau data.

The table shows the sectors that get affected mainly from US tariffs on India and the total potential impact on trade numbers.

Exporter groups estimate hikes could affect nearly 55% of India's $87 billion in merchandise exports to the US , while benefiting competitors such as Vietnam, Bangladesh and China.

Sustained tariffs at this rate could dent India's growing appeal as an alternative manufacturing hub to China for goods such as smartphones and electronics.

The US -India standoff has raised questions about the broader relationship between India and the US , important security partners who share concerns about China.

However, on Tuesday the US State Department and India's Ministry of External Affairs issued identical statements saying senior officials of the ministries and defense departments met virtually on Monday and expressed "eagerness to continue enhancing the breadth and depth of the bilateral relationship."

Both sides also reaffirmed their commitment to the Quad, a partnership that brings together the US and India with Australia and Japan.