Breaking News Live Updates: India braces for Trump’s 50% tariffs

From 9:31am today, the United States is all set to apply the steep 50 per cent tariffs on Indian merchandise. The decision immediately puts pressure on industries that rely on low margins and large workforces. Products such as apparel, textiles, gems and jewellery, shrimps, carpets and furniture now face prices that could make them uncompetitive in the American market. The likely result is shrinking demand and mounting job losses for workers in India’s export clusters.

Forecasts Show Sharp Decline
Trade experts are bracing for a major slump. According to the Global Trade Research Initiative (GTRI), India’s merchandise exports to the US could shrink to $49.6 billion in 2025-26. That compares with nearly $87 billion in 2024-25. The think-tank estimates that two-thirds of all Indian exports to the US by value are now subject to the 50 per cent rate, with effective duties in some categories crossing 60 per cent.

What Escapes the New Duties
Not every product is caught in the tariff net. Roughly 30 per cent of exports, valued at $27.6 billion in the last financial year, remain exempt. This includes categories such as pharmaceuticals, electronics and petroleum products. A smaller share, around 4 per cent of exports, mainly auto parts, will face a 25 per cent tariff instead.

Competitors Move In
The sharp increase in costs for Indian goods opens the door for rivals. Countries such as Vietnam, Bangladesh, Cambodia, China and Pakistan, which face lower tariffs in the United States, are expected to expand their market share. For India, this could mean a long-term erosion of competitiveness in sectors where it has traditionally been strong.

The Reasons Behind the Tariffs
The 50 per cent rate is not a single measure. It is the combination of two moves by former President Donald Trump. First, a 25 per cent tariff was announced in late July. Then, an additional 25 per cent was imposed in early August as a penalty for India’s purchases of Russian oil and defence imports from Moscow. This second measure has now taken effect.

Wider Trade Impact
The US is one of the very few countries where India enjoys a trade surplus in goods. The imposition of these tariffs could erode that position, leaving India more dependent on markets where it already runs heavy deficits, including China, Russia and the UAE. For exporters, the challenge will not only be in absorbing immediate losses but also in finding new markets to sustain production and employment.