India downplays Trump’s 50% tariff shock, calls it a temporary hurdle in US trade ties

The impact of Trump’s tariff is unlikely to be “as severe as feared” and exporters should not panic, officials told PTI.

The United States on Wednesday formally imposed an additional 25 percent duty on select Indian products, on top of an existing 25 percent levy, effectively doubling tariffs to 50 percent.

Washington has tied the move to New Delhi’s continued imports of Russian oil and defence hardware.

Industry braces for jolt

Exporters, however, fear what some are calling the biggest shock of their careers as they scramble to assess the impact on business.

Officials acknowledged concerns but emphasised that efforts are underway to cushion the blow by connecting exporters with global supply chains and seeking feedback directly from American buyers.

Trade diversification push

With multiple free-trade agreements (FTAs) already signed and more in the pipeline, the government is positioning India Inc. to tap new trade corridors.

A key council meeting on September 3–4 will also deliberate on lowering domestic tax levies across a range of goods and services, in line with Prime Minister Narendra Modi’s recent GST reforms that are slated to take effect by Diwali.

“Temporary phase” in ties

Government sources reiterated to PTI that communication channels with Washington remain active and India will continue efforts to resolve the standoff.

They maintained that exporters should not view the tariff escalation as a long-term rupture, stressing it is a “temporary phase in a long-term relationship” with the US.