Indian exports worth $48.2 bn to face 50% tariff after Trump’s order: Govt in Lok Sabha

India’s merchandise exports worth an estimated $48.2 billion will be impacted by the United States’ decision to impose a 50 per cent tariff on most Indian goods, Union Minister of State for Commerce and Industry Jatin Prasada told the Lok Sabha on Tuesday.

Responding to a question in Parliament, Prasada said: “The Government is committed to secure and advance country’s national interest and protect the welfare of farmers, workers, entrepreneurs, exporters, MSMEs and all sections of industry, adding that all necessary steps are being taken to help mitigate impact on trade including through appropriate export promotion and trade diversification measures.”

The hike follows US President Donald Trump’s August 6 executive order that imposed an additional 25 per cent levy on Indian goods, on top of the existing 25 per cent duty. The move, part of the order titled Addressing Threats to the US by the Government of the Russian Federation, penalises New Delhi for continuing to import Russian oil. From August 27, nearly all Indian exports to the US, barring a small exemption list, will face a steep 50 per cent tariff.

India has strongly criticised the move, calling it “unfair and unreasonable,” while pointing out that other major importers, including the European Union, China, and even the US itself, continue to buy Russian commodities.

So far, key categories such as electronics, pharmaceuticals, and petroleum products have been exempt from the steepest duties. Still, the broader impact remains significant. Earlier, on August 11, the Finance Ministry had said that about 55 per cent of Indian exports to the US were already facing 25 per cent tariffs, but did not comment on the additional duty’s effect.

Commerce Secretary Sunil Barthwal on August 14 said India and the US are “fully engaged” in talks for a Bilateral Trade Agreement (BTA), raising hopes of some relief.

Meanwhile, the Centre has announced measures to support domestic industries. On Tuesday, the government exempted import duties on cotton from August 19 to September 30, after persistent lobbying by industry bodies. The move is expected to give a lifeline to India’s garment sector, which is directly hit by the US tariff hikes. Before the exemption, cotton imports attracted an 11 per cent duty. Industry groups now expect the relief to be extended beyond September.

India is targeting $100 billion in textile exports by 2030, and officials say competitiveness measures are vital to ensure growth amid tariff headwinds. The tariff shock comes at a delicate moment, when American buyers had begun shifting orders from China and Bangladesh to India due to supply chain diversification and political instability in Dhaka.

(With agency inputs)