US Tariff Hike May Slash Indian Exports By Up To 50%, Warns GTRI

New Delhi, Aug 7 (KNN) The newly announced US tariffs on Indian goods are expected to significantly disrupt trade, potentially reducing exports to America by 40–50 percent, according to a statement released by think tank Global Trade Research Initiative (GTRI) on Wednesday.

The US administration on August 6 imposed an additional 25 percent duty on all Indian imports, raising the total tariff burden to 50 percent. 

The measure, effective from August 27, is said to be a response to India’s continued purchase of oil from Russia.

GTRI Founder Ajay Srivastava warned that the sharp hike in tariffs could severely impact India's USD 86.5 billion annual exports to the US, spanning key sectors such as textiles, engineering goods, and machinery. 

“The move places India among the most heavily taxed U.S. trading partners, above China, Vietnam, and Bangladesh,” Srivastava noted.

In a critical comparison, Srivastava pointed out that China imported USD 62.6 billion worth of Russian oil in 2024—surpassing India’s USD 52.7 billion—yet has not faced similar punitive trade measures. 

He attributed this discrepancy to China’s strategic control over materials vital to U.S. defence and technology industries, including gallium, germanium, rare earths, and graphite.

The GTRI further highlighted that other U.S. allies, such as the European Union, have also maintained substantial trade ties with Russia. 

The EU imported USD 39.1 billion in goods from Russia last year, including USD 25.2 billion in oil, without attracting U.S. sanctions of this magnitude. Even the U.S. itself imported USD 3.3 billion worth of strategic materials from Russia in the same period.

“The tariffs will make Indian goods far costlier for American buyers, eroding competitiveness and potentially cutting India’s exports to the U.S. nearly in half,” Srivastava cautioned.

The sharp escalation in trade duties is expected to strain economic relations between the two countries, raising broader concerns over the politicisation of trade policy in response to global energy dynamics.

(KNN Bureau)