Will doubling of US tariffs on Indian goods reshape trade and prices?

US tariffs on many Indian goods have doubled to as high as 50 percent, and they took effect on August 27, 2025, so exporters now face base duties plus a 25 percent surcharge that lifts overall rates sharply in the US market. The action links to India’s purchases of Russian oil and follows an earlier 25 percent layer, so the combined impact now hits a wide set of shipments. Sectors most exposed include textiles, garments, gems and jewellery, carpets, furniture and shrimp, while areas like pharmaceuticals and some electronics reportedly see limited exemptions for now.

Trade math looks tough because the US bought over $85–87 billion of Indian goods last year, and estimates suggest roughly half of that basket could meet higher duties, so margins for many small exporters will compress and some orders may move to rivals in Vietnam, Indonesia, Bangladesh or Pakistan. Transit relief applies to shipments that left before August 27 and clear by September 17, and specific tariff notes list exclusions such as steel, aluminum and certain autos from the extra surcharge, so classification and timing matter to reduce costs. As prices rise in the US, buyers may switch sources, and that can leave Indian producers with inventory that does not easily pivot to domestic demand because of quality differences and scale economics.

Jobs risk is highest in labor intensive clusters, and industry bodies warn of closures if orders fall, but some Indian firms can diversify to the EU, Middle East and Africa or renegotiate with US buyers on shared costs, so outcomes may vary by product mix and contract terms. American consumers could also see higher prices for textiles and certain seafoods as supply chains re-route, and analysts say the tariff shock may create near term inflation pressure before settling into new sourcing patterns. Talks may restart, but until then, exporters should recheck HTS codes, use any exemptions, and consider in-transit relief windows to soften the blow.