The United States has imposed a hefty tariff of 50% on India, threatening nearly 1 million jobs. The textile, leather, jewelry, auto parts, chemical, pharma, and electronics sectors will be directly affected by this decision. According to the CTI, this will impact India's $48 billion exports.
US tariff: The United States has imposed a total tariff of 50% on goods coming from India, effective August 27th, putting nearly 1 million jobs at risk in the country. This decision will impact the textile, leather, jewelry, auto parts, pharma, and electronics sectors. The CTI has warned that this could harm India's $48 billion in exports and create uncertainty for traders regarding existing orders.
Why did the US impose the tariff?
The United States had initially imposed a 25% tariff on India from August 7th, 2025. Now, from August 27th, 2025, it has been further increased to a total of 50%. After this new tariff, Indian goods will become approximately 35% more expensive in the American market. This means that American buyers will now prefer to procure goods from countries like China, Vietnam, and Bangladesh instead of India.
Which sectors will be most affected?
Brijesh Goyal, Chairman of the CTI (Chamber of Trade and Industry), says that the textile, leather, gems and jewelry, auto parts, chemical, pharma, seafood, and electronics sectors will face the biggest blow. Approximately 1 million people working in these sectors are likely to become unemployed due to this tariff.
$48 billion worth of exports at risk
According to the CTI, this decision by the United States could affect approximately $48 billion of India's exports. India exports pharmaceuticals, textiles, gems and jewelry, auto parts, chemicals, and seafood to the United States on a large scale. Now, with a 50% tariff imposed on these products, their demand in the American market may decline.
Questions being raised on old orders
A major question among traders is whether the new tariff will apply to companies that have already taken orders or whose goods have already been shipped to the United States. No clear information has been provided by US agencies in this matter yet. This has increased the concern of small and medium-sized traders.
Electronics and Pharma more expensive
Last year, India sent electronics worth ₹1.25 lakh crore and medicines worth ₹92 thousand crore to the United States. These had tariffs of 0.41% and 0% respectively. Now, after a 50% tariff is levied, these products will become very expensive in the United States.
Engineering and Textile sectors hit
In 2024, India sent engineering goods worth approximately ₹1.7 lakh crore to the United States, such as steel products, machinery, and automobile parts. These previously had a 10% tariff, which has now increased to 50%. This could make Indian goods expensive in the American market, leading to a 20-25% drop in demand.
CTI: Reduce dependence on the US
Brijesh Goyal, Chairman of the CTI, has written a letter to Prime Minister Narendra Modi stating that India needs to respond to this attitude of the United States. For this, India needs to reduce its dependence on the US and explore new markets such as Germany, Britain, Singapore, and Malaysia.
Goyal suggested that India could impose retaliatory tariffs on expensive gems, nuclear reactor parts, aircraft equipment, electrical goods, plastics, nuts, and steel coming from the United States.
