Indian exporters are bracing for major disruption after the US Department of Homeland Security confirmed that Washington will impose an additional 25 percent tariff on all goods originating in India from Wednesday, further ratcheting up trade pressure on the Asian country.
Total US tariffs on Indian products will now be up to 50 percent – among the highest Washington has ever imposed, after President Donald Trump announced punitive measures earlier in August over India’s increased purchases of Russian oil.
According to a notification from the Department of Homeland Security, the new duties will apply to goods entering the US for consumption or being removed from warehouses from 12:01 p.m. ET on Wednesday (9:31 a.m. IST).
The Indian rupee fell 0.2 percent to 87.75 against the US dollar in early trade, although the greenback weakened against many other currencies.
The exemptions will include shipments in transit with proper documentation, humanitarian aid and goods covered by reciprocal trade programs. The notice said the move was in response to “India’s indirect support for Russia’s military invasion of Ukraine.”
India’s Commerce Ministry did not immediately respond to a request for comment, Reuters reported.
“The government has no hope of any immediate relief or postponement of the US tariffs,” said a Commerce Ministry official, who spoke on condition of anonymity because he was not authorized to speak to the media. He added that exporters affected by the tariffs would be given financial assistance and encouraged to shift to alternative markets, including China, Latin America and the Middle East.
“The government has identified nearly 50 countries for increasing Indian exports, especially textiles, processed foods, leather goods and seafood,” the official said.
Prime Minister Narendra Modi has vowed not to compromise the interests of Indian farmers “even if it comes at a high cost.” He is also taking steps to improve relations with China, including a planned first visit to the country in seven years at the end of the month.
