New Delhi: Indian exporters will face a steep new hurdle in the United States market from Wednesday, August 27. The Trump administration has formally notified New Delhi that it will slap a 50% tariff on Indian goods, a move that could reshape trade flows and hurt key industries.
The US Department of Homeland Security issued a late-night letter on Monday confirming that the additional duty, a supplementary 25% charge over existing tariffs, will apply from 12:01 am Eastern Time on August 27.
Who Gets Hit the Hardest?
According to a study by the Global Trade Research Initiative (GTRI), the new duties cover two-thirds of India’s exports to the US, around $60.2 billion worth of goods.
The sharpest pain will be felt in textiles, gems and jewellery, shrimp, carpets, and furniture, all sectors that employ millions. GTRI estimates shipments in these categories could shrink by up to 70%, opening the door for rivals like China, Vietnam, and Mexico to capture market share.
“These are labour-intensive sectors and any prolonged disruption could affect employment directly,” the think tank warned in its report.
Some Industries Safer Than Others
Analysts point out that pharmaceuticals, smartphones, and steel may escape the worst of the hit. Strong domestic demand and specific tariff exemptions are expected to cushion these industries.
On the flip side, capital goods, chemicals, automobiles, and food and beverages could face some of the most difficult adjustments.
The Bigger Picture: Can India Absorb the Shock?
Despite the grim outlook for exporters, economists argue India’s overall economy is well-positioned to absorb the shock. Fitch Ratings projects growth at 6.5% in FY26, while Morgan Stanley has said India is “the best placed country in Asia” to weather a tariff war, thanks to its relatively low dependence on goods exports compared to peers.
Sectors like telecom, hospitality, aviation, cement, and services are expected to continue driving domestic consumption and offset external weakness.
The US is India’s largest textile market. Over the past five years, India has lifted its share in US textile imports from 6% to 9%, even as China’s share has slipped. This progress could now stall, with American buyers likely turning to cheaper suppliers.
For Indian exporters, the next few weeks will be about survival — finding new buyers, lobbying for government support, and waiting to see whether Washington and New Delhi can negotiate a way out.