Daily News - Thursday, 7 August 2025
US raises extra tariff in India to 50% (Financial Express)
In a dramatic escalation, U.S. President Donald Trump raised the tariff on Indian imports to 50%, up from the previously announced 25%, citing India’s continued purchase of Russian oil—a move that has made India, along with Brazil, the most heavily tariffed nation by the U.S. and has severely strained diplomatic ties to levels not seen in decades, despite an open 21-day window for India to reconsider its energy policy. India has firmly pushed back, calling the U.S. action “unfair, unjustified and unreasonable,” with the Ministry of External Affairs asserting that its oil imports are based on market conditions and national energy security needs, and accusing the U.S. of hypocrisy for criticising India while quietly importing Russian uranium, palladium, and fertilisers. The 50% additional tariffs—which come on top of MFN rates and target up to 65% of India’s $87 billion exports to the U.S.—could cripple key industries like textiles, gems and jewellery, shrimp, leather, chemicals, and machinery, with industry bodies warning of job losses, canceled orders, and a 40–50% plunge in exports as Indian goods become far more expensive than those from competitors like Vietnam, Bangladesh, and China.
Tariff war will have worse impact than Covid: Kerala minister Balagopal (Hindustan Times)
Kerala Finance Minister K.N. Balagopal has warned that the emerging global tariff war—especially the U.S.'s imposition of steep duties on Indian exports while pushing India to reduce its own tariffs—poses a more damaging threat to the Indian economy than the Covid pandemic itself, citing unfair trade pressures such as reduced import duties on luxury vehicles like Land Rover and Jaguar, and foreign lobbying to slash India’s GST rates. Despite the Centre tightening Kerala’s borrowing limits, Balagopal highlighted that the state has navigated post-Covid fiscal stress through sharp revenue growth—state revenues rose from ₹54,000 crore in 2021 to ₹92,000 crore in 2024–25, with the revenue-to-GSDP ratio improving from 56% to nearly 75%—enabling investment in infrastructure, social security, the Vizhinjam International Seaport, and research institutions. Speaking at a seminar in Thiruvananthapuram, he also criticized the 2017 GST framework as unfair to states, stressing that Kerala is working to overcome the deep disruptions caused by the pandemic and move toward a more resilient economic path, even as the White House’s latest executive order slaps a sweeping 25% tariff on Indian goods across nearly 70 nations.
Indian exporters on alert as US 50% tariff threatens key sectors such as Leather, Gems and Jewellery (Financial Express)
The U.S. has now imposed a punitive 50% tariff on Indian exports—a move applied exclusively to India among Russian oil buyers—threatening to slash Indian exports to the U.S. by up to 50% and dealing a brutal blow to key sectors like textiles, gems and jewellery, shrimp, leather, chemicals, and machinery that collectively make up over $45 billion in annual trade. Exporters are reeling from the impact, with industry leaders warning of massive job losses, vanishing margins, and cancelled orders, as Indian goods become unviable in the U.S. market, where competitors like Ecuador, Vietnam, and Bangladesh enjoy significantly lower tariffs, placing Indian MSMEs at a 30–35% disadvantage and jeopardising long-standing client relationships. Amid growing anxiety, all hopes now rest on the early finalisation of a bilateral trade agreement with the U.S., but India has drawn firm lines—particularly around concessions on agriculture, dairy, and GM products—leaving the timeline uncertain and the path to relief still clouded.
Can’t absorb the shock, lay-offs inevitable, say apparel exporters (Financial Express)
India’s textile and apparel sector, already struggling with post-Covid recovery, has been crippled by the U.S. decision to hike tariffs to 50%, eliminating the limited price advantage it held over rivals like Bangladesh (20%), Vietnam (20%), and Sri Lanka (20%)—a devastating move for a $10 billion-a-year industry that supplies nearly a third of its garments to the U.S. market. With over 45 million jobs at stake in this labour-intensive sector—the country’s second-largest employer after agriculture—industry leaders are sounding the alarm over inevitable mass layoffs, shuttering of MSMEs, and irreversible loss of market share as Indian exporters become uncompetitive, while peers in China and Southeast Asia negotiate better trade terms and lower tariffs. Exporters, who once hoped to capitalise on Trump’s earlier tariff moves, are now urging the Indian government for immediate fiscal intervention, warning that without direct support, the raised tariffs could sound the death knell for thousands of apparel businesses dependent on U.S. buyers who are already reassessing sourcing decisions amid surging landed costs.
India’s US exports worth $64 billion are at risk over Trump’s 25% tariff threat (Financial Express)
India is bracing for the loss of competitiveness on nearly $64 billion worth of exports to the U.S. due to President Trump’s new 25% tariff and a presumed 10% penalty for continuing to purchase Russian oil—bringing the effective tariff rate to 35% on a vast range of high-value products like garments, pharma, petrochemicals, and jewellery, according to an internal government report cited by four senior officials. While the direct hit to India’s $4 trillion economy may be limited to a 0.4% dip in GDP growth, the real concern lies in the severe price disadvantage Indian exporters will face, especially against lower-duty rivals, which could wipe out up to 80% of India’s U.S.-bound exports and cause long-term erosion of its share in its largest export market. With tensions deepening into India’s worst diplomatic standoff with Washington in years, National Security Adviser Ajit Doval’s visit to Moscow—focused on oil imports and pending S-400 deliveries—will be followed by Foreign Minister Jaishankar’s trip, as India tries to strike a delicate balance between defending strategic autonomy and responding to U.S. pressure without compromising vital interests.
