India Faces 50% U.S. Tariff Shock – Export Crash Looms, Govt Launches ₹25,000 Cr Rescue Plan

New Delhi(The Uttam Hindu): The United States has officially imposed a 50% tariff on Indian exports starting today, in retaliation against India’s continued purchase of oil and defense equipment from Russia. This move places India alongside Brazil in the list of nations facing the highest U.S. trade penalties.

The tariff rollout, applied in two phases (25% in July and an additional 25% in August), is expected to impact nearly two-thirds of India’s total goods trade with the U.S., directly hitting 12 major export sectors.

According to Crisil Ratings, the consequences could be severe – India’s exports to the U.S. may fall by up to 43% this fiscal year, with certain product categories witnessing as much as 70% decline.

Key Highlights:

Trade Hit: India’s $48 billion worth of exports to the U.S. fall under the tariff’s scope.

Exempted Sectors: Pharmaceuticals, electronics, and petroleum products (about 30% of exports) remain unaffected.

Impact Zones: Major production hubs like Tiruppur, Noida, Surat, Visakhapatnam, and Jodhpur are already facing disruptions.

Global Winners: Vietnam, Bangladesh, China, Turkey, Indonesia, and Mexico may benefit from India’s loss due to their lower tariff exposure.

In response, the Indian government has launched a ₹25,000 crore Export Promotion Mission, focusing on trade finance, credit facilities, GST reforms, SEZ upgrades, and boosting the global reach of ‘Brand India’.

Commerce Minister Piyush Goyal has ruled out retaliatory tariffs against the U.S. but assured exporters that the government will deploy every policy, financial, and diplomatic tool to safeguard jobs and competitiveness. India is also expediting free trade agreements (FTAs) with the European Union, the UK, and other partners to reduce dependence on the American market.