Donald Trump's 50% tariffs go live: Who it hits, which jobs vanish, what's India's response. Explained

Donald Trump's 50% tariff on a wide range of Indian goods kicks in today, a move that places over $48 billion worth of exports at risk. Announced in two waves by the US president, the duties cover nearly two-thirds of India’s goods trade with its largest export market.

Here’s what it means and what happens next.

1. What’s the new U.S. tariff and why is it being imposed?

The 50% tariff comprises two parts: a 25% base duty declared in July, and a second 25% "penalty" announced in August, reportedly in response to India’s continued imports of Russian oil and defense equipment. The full tariff came into force at 12:01 AM EDT on August 27.

While some categories like pharmaceuticals, electronics, and petroleum products (30% of exports) remain duty-free, and auto parts (4%) face 25%, the vast majority of India's exports now face 50% duties — making them largely uncompetitive in the U.S. market.

2. Which Indian sectors are hit the hardest?

Twelve major export sectors are affected. These include:

• Textiles and apparel – $10.9 billion
• Gems, diamonds and jewellery – $10 billion
• Machinery and appliances – $6.7 billion
• Agri and processed food – $6 billion
• Metals (steel, aluminium, copper) – $4.7 billion
• Organic chemicals – $2.7 billion
• Shrimp and seafood – $2.4 billion
• Handicrafts, carpets, leather, furniture – over $5 billion combined

Production has reportedly been impacted in hubs like Tiruppur, Noida, Surat, Visakhapatnam, and Jodhpur. Crisil Ratings warns that up to 70% of export volumes in some categories could be lost, with India’s U.S.-bound exports falling 43% this fiscal year.

3. Which countries benefit from India’s losses?

Competitor nations such as Vietnam, Bangladesh, China, Turkey, Indonesia, and Mexico, who currently face lower or no U.S. tariffs, are expected to capture India’s lost market share across textiles, seafood, machinery, and consumer goods.

4. How is India responding to the tariff blow?

The government is working on a ₹25,000 crore Export Promotion Mission. Key components include:

• Trade finance and credit access
• GST tweaks for textiles and food processing
• Reimbursement of part of the U.S. tariff for sectors like jewellery
• Reforms in Special Economic Zones (SEZs)
• Boosting global ecommerce and warehousing under “Brand India”

Commerce Minister Piyush Goyal, at an event, has ruled out retaliation, but said India will use every available tool — policy, fiscal, and diplomatic — to protect exporters and jobs.

5. Are there any ongoing trade negotiations with the U.S.?

Yes. India and the U.S. are in talks over a bilateral trade agreement (BTA). However, a key visit by American trade officials scheduled for August 25 was postponed, delaying momentum. In the meantime, India is accelerating free trade agreements (FTAs) with the EU, UK, and others to diversify its export markets and reduce dependence on the U.S.