US issues draft notice to implement 50% tariffs on Indian goods from August 27

The United States on Tuesday issued a draft notification stating that it will impose a 50% tariff on goods imported from India starting Wednesday.

The Department of Homeland Security issued the draft notification on Tuesday, and the document will be published in the Federal Register on Wednesday.

Diplomatic tensions between New Delhi and Washington have escalated after the Donald Trump administration announced on August 6 that it would double the tariffs on goods imported from India to 50% for purchasing Russian oil amid the Ukraine war.

A 25% so-called reciprocal tariff has already taken effect, and the secondary tariff of 25% will be enforced from Wednesday.

Trump has repeatedly alleged that India’s imports were fuelling Russia’s war in Ukraine.

The tariff hikes could hurt close to 55% of India’s merchandise exports to the US worth $87 billion, and may give an advantage to competitors such as Vietnam, Bangladesh and China, exporter groups told Reuters.

“The US customers have already stopped new orders,” the news agency quoted Pankaj Chadha, president of the Engineering Exports Promotion Council, as saying. “With these additional tariffs, the exports could come down by 20-30% from September onward.”

US cites ‘threats from Russia’

The draft notification on Tuesday said that the higher levies were being imposed due to “threats to the United States by the government of the Russian Federation”.

Exceptions will apply to in-transit shipments with proper certification, humanitarian aid and goods covered under reciprocal trade programmes.

Products such as iron, steel, aluminium, semi-finished copper and intensive copper derivative products and passenger vehicles such as sedans, sport utility vehicles, crossover utility vehicles, minivans and cargo vans are also exempt, the notification said.

Prime Minister Narendra Modi on Monday said his government would not succumb to pressure, The Indian Express reported.

“No matter how much pressure comes, we will keep increasing our strength to withstand it,” the prime minister said. “My government will never let harm come the way of small entrepreneurs, farmers, livestock rearers.”

New Delhi has previously said that it was “extremely unfortunate” that the US had chosen to impose additional tariffs on India “for actions that several other countries are also taking in their own national interest”.

“We reiterate that these actions are unfair, unjustified and unreasonable,” the Ministry of External Affairs spokesperson had said at the time. “India will take all actions necessary to protect its national interests.”