Indian exporters are raising serious concerns over the United States’ decision to impose steep new tariffs on a wide range of Indian goods, warning that nearly $87 billion worth of exports could be impacted.
The move, which took effect on Wednesday, follows the breakdown of trade negotiations between New Delhi and Washington and marks the most significant disruption in bilateral trade in recent years.
According to industry estimates, the new tariffs—announced by U.S. President Donald Trump and confirmed in a Homeland Security Department notice—will affect 55% of India’s merchandise exports to the U.S..
Exporters warn that the additional 25% duty, which in some cases pushes total tariffs to as high as 50%, could cripple competitiveness for Indian products, opening the door for rival exporters such as Bangladesh, Vietnam, and China.
Textiles, pharmaceuticals, chemicals, engineering goods, and information technology hardware are among the industries expected to face the heaviest hit.
Export associations say order cancellations have already begun, with U.S. buyers seeking cheaper alternatives in Southeast Asia.
“This is an unprecedented setback,” said Arvind Singhal, an executive with a leading export council.
“Our margins are already under pressure due to high energy and logistics costs. Adding a 25% tariff makes Indian products far less attractive compared to competitors.”
The Commerce Ministry of India, while declining to comment publicly, confirmed through an official source that there is “no immediate hope for relief or delay” in the tariff rollout.
The government has pledged targeted assistance for exporters most affected, while encouraging diversification toward Latin America, the Middle East, and intra-Asian trade routes.
Financial markets reflected investor unease as news of the tariffs broke.
The Indian rupee slid to a three-week closing low of 87.68 against the U.S. dollar, despite suspected intervention by the Reserve Bank of India.
Meanwhile, benchmark indices NSE and BSE both shed 1%, recording their worst trading session in three months.
Analysts caution that prolonged trade restrictions could widen India’s trade deficit, reduce foreign exchange inflows, and slow GDP growth at a time when the economy is already grappling with weak consumer demand.
U.S. officials, including Treasury Secretary Scott Bessent and trade adviser Peter Navarro, have framed the tariffs as retaliation for India’s increased crude oil imports from Russia, which they allege indirectly funds Moscow’s war in Ukraine.
Before the conflict, Russian crude accounted for less than 1% of India’s oil imports.
Today, it makes up over 42%, reflecting New Delhi’s efforts to secure discounted energy amid global price shocks. Washington has described this shift as “unacceptable,” accusing India of profiteering from the war.
“India cannot expect unfettered access to U.S. markets while simultaneously undermining Western sanctions against Russia,” Navarro told reporters in Washington.
Despite Washington’s objections, New Delhi has issued no directive to reduce Russian oil purchases, leaving refiners to make decisions based on commercial viability.
Three refinery executives confirmed to Reuters that Russian oil remains cheaper and readily available compared to Middle Eastern grades.
This places India in a delicate balancing act—seeking affordable energy to fuel its growing economy while avoiding long-term fallout with a critical trade partner.
Export councils and trade bodies are pressing the Indian government to reopen negotiations with Washington to prevent lasting damage to bilateral trade.
The United States remains India’s largest export destination, accounting for nearly one-fifth of its total merchandise exports.
“If this dispute drags on, we risk losing market share permanently,” warned S. Ganeshan, president of the Federation of Indian Exporters.
“Once buyers shift their supply chains to Vietnam or Bangladesh, it will be very difficult to win them back.”
Experts say that while diversification into emerging markets may offer some cushion, replacing the scale and profitability of U.S. trade will not be easy.
Moreover, with global demand slowing, India’s exporters face heightened uncertainty.
For now, exporters are bracing for painful months ahead, while both governments weigh their next moves.
Whether this escalates into a full-blown trade war or opens a window for renegotiation may determine the trajectory of India-U.S. economic relations for years to come