India Exporters Say 50% Trump Levy ‘Severe Setback’

Indian exporters have described the United States’ decision to impose a 50% tariff on Indian goods as a “severe setback,” warning of significant disruptions to trade and losses for small and medium-sized enterprises (SMEs).

The fresh wave of tariffs follows U.S. President Donald Trump’s August 7 executive order imposing an additional 25% levy on Indian exports, doubling the total tariff burden to 50%. The move is widely seen as retaliation for India’s continued purchase of Russian oil, despite Western sanctions.

The Federation of Indian Export Organisations (FIEO) raised the alarm over the development, stating that nearly 55% of Indian shipments to the U.S. will now be impacted.

FIEO President S.C. Ralhan warned that the tariff hike puts Indian exporters at a competitive disadvantage of 30–35% compared to exporters from countries not subject to such duties.

“This is a severe setback to our exporters, especially MSMEs, who will find it difficult to sustain orders at these tariff levels,” Ralhan said.

Exporters report that several buyers in the U.S. have already delayed or paused orders, awaiting clarity on the policy’s enforcement. The timing is especially damaging, as many Indian exporters were preparing shipments for the upcoming festival season.

Industry insiders say sectors such as textiles, engineering goods, leather products, and processed foods are likely to bear the brunt of the hike. Many businesses fear they may be priced out of the U.S. market altogether, forcing them to either slash margins or seek alternative markets.

The new tariffs are set to take effect 21 days from the date of the executive order, around August 28, 2025.