US Tariffs to Hit Indian Merchandise Exports by 50%–63.9%, Warn Experts

The 50 per cent tariffs increases over time on the Indian goods by the US President Donald Trump pending the fortnight hence unless there is breakthrough on a trade deal between the two states.

Besides a flat tariff of 50 per cent on Indian products, certain goods will attract other most-favoured nation (MFN) duty.

An example is apparel (knitted) which will be subjected to 13.9 per cent additional MFN tariff over and above the 50 per cent tariffs. The total tariffs of apparel (woven) will amount to 60.3 per cent, which will incorporate 10.3 per cent MFN tariffs.

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Apparel, knitted and woven exports to the US combined were to the tune of approximately USD 5.5 billion in 2024-25 as a Global Trade Research Initiative (GTRI) analysis shows.

The GTRI review observations were that the other merchandise goods that will be facing tariffs above 50 per cent include diamonds, gold, related products; machinery, mechanical appliances; steel, aluminium, copper; textiles; organic chemicals; carpets; furniture, bedding, mattresses. The efficient tariffs in these goods will be between 51-59 per cent.

Tariffs will be removed on smart phones, pharmaceuticals and petroleum products. Exports of petroleum products, however, will incur 6.9 per cent, MFN tariffs.

In the last couple of months, an interim trade deal has been in discussion between India and US, although the Indian side has reservations about American request to liberalize the agriculture and dairy market. India relies heavily on agriculture and dairy because the two industries offer income to a huge number of individuals.

To begin with, President Trump declared 25 per cent tariffs on Indian products as well as an undetermined penalty, despite the expectation of an interim India-US trade agreement that could have otherwise led to the prevention of high tariffs. Less than a week afterwards, he added another 25 per cent tariff to the 25 per cent tariff on imports of Russian oil by India thus pushing the tariff to a total of 50 per cent.

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India and the US kicked off negotiations towards a fair, balanced and mutually beneficial Bilateral Trade Agreement (BTA) in March this year with a targeted timeline of finalizing the first phase of the Bilateral Trade Agreement this October- November 2025.

On April 2, 2025, the president trump issued an executive order that required mutual tariffs regarding different trade partners laying different tariffs of between 10-50 per cent.

He later put the tariffs on hold, at 90 days, and applied a 10 per cent lowest tariff. This was to expire July 9 and it was subsequently extended by the US administration to August 1.

In the wake of ongoing Monsoon session of Parliament, Commerce and Industry Minister Piyush Goyal has made a similar statement in both Houses asserting that the government is actually studying the impact of the tariffs and will do everything to protect national interest.

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