The Trump administration has scheduled the implementation of revised tariffs on Indian goods, effective after 12:01 a.m. on August 27. A public notice has been issued, announcing an additional 25 per cent tariff on Indian products. The notice specifies that these increased levies will apply to Indian goods entering the U.S. market for consumption on or after 12:01 a.m. They will also affect goods withdrawn from U.S. warehouses for use after that time. The hike, according to the US is the penalty for New Delhi’s continued buying of Russian oil, which Trump said is funding Moscow’s war in Ukraine – a charge strongly rejected by the world’s 4th largest economy.
What The Order Says?
“To deal with the national emergency described in Executive Order 14066, I determine that it is necessary and appropriate to impose an additional ad valorem duty on imports of articles of India, which is directly or indirectly importing Russian Federation oil. In my judgment, imposing tariffs, as described below, in addition to maintaining the other measures taken to address the national emergency described in Executive Order 14066, will more effectively deal with the national emergency described in Executive Order 14066,” Executive Order 14329, dated August 6, 2025, read.
At What Time Will New Tariff Take Effect?
The notice specifies that the tariffs will take effect at 12:01 AM Eastern Daylight Time (EDT) on August 27. As India is 9 hours and 30 minutes ahead of EDT, this translates to 9:31 AM Indian Standard Time (IST) on the same day. Consequently, the 50% tariffs will apply in India starting at 9:31 AM IST on August 27.
Why It Matters?
The US is the biggest market for India’s exports, buying about one-fifth of what India sells abroad. If a 50% duty is added, Indian goods could become more expensive and less competitive than products from Vietnam, Bangladesh, and Mexico. In FY24, India exported gems and jewellery worth $9.2 billion, but shipments have now stopped, dealing a blow to employment in the industry. Auto parts, medicines, and electronics are also under strain due to rising costs. Seafood exporters, particularly shrimp exporters who send more than half of their output to the US, fear steep losses and order cancellations once the higher tariff comes into effect. Overall, India exported goods worth $86.5 billion to the US in FY24, accounting for about 20% of the country’s total exports. The think tank GTRI estimates that India’s exports to the US might fall by 40–50%, which would reduce the country’s foreign exchange earnings.
High-Level Meet At PMO Office
To address this economic challenge, the Prime Minister’s Office is holding a high-level meeting today, August 26, 2025, chaired by Principal Secretary P.K. Mishra. Senior officials from the Commerce Ministry, NITI Aayog, and export councils are working on strategies to reduce the impact on India’s $87 billion exports to the U.S., particularly in labour-intensive sectors such as textiles, gems, and chemicals. The discussions are centred on providing targeted support to small and medium enterprises rather than offering broad subsidies, while exporters’ requests for an Emergency Credit Line Guarantee Scheme are also under consideration.
The commerce and industry ministry has been consulting exporters and export promotion councils to understand the impact of the existing 25% levy, which firms say has already squeezed margins and reduced competitiveness.
The government is considering policy options that focus on giving targeted support to specific industries rather than broad, economy-wide measures. Exporters had requested an Emergency Credit Line Guarantee Scheme (ECLGS), which offers collateral-free loans with government-backed risk cover, but officials believe sector-specific help may be more effective. According to one official, very small firms find sector-specific credit lines with collateral support useful, and cluster-based working capital funds are also being considered to ease cash flow pressures. Protecting export-oriented units and small and medium enterprises remains central to the government’s strategy, as these sectors are most vulnerable to external shocks. Tuesday’s meeting is expected to finalise the details of India’s response as exporters prepare for the upcoming tariff increase.
The government’s move comes at a time of rising concern that the 50% US tariff could reduce profit margins for Indian exporters, disrupt supply chains, and weaken competitiveness in key sectors such as textiles, leather, engineering goods, and speciality chemicals.
Prime Minister Narendra Modi has emphasised resilience, urging a “Swadeshi” push to promote local goods and protect national interests, especially for farmers and small businesses. With the festive season nearing, this strategy aims to bolster domestic consumption. However, the tariffs threaten to slash India’s GDP growth by 0.2–0.4%, risking a drop below 6% this year.
