The expanded tariffs encompass a wide array of Indian exports to the U. S., including textiles, gems and jewelry, seafood, and furniture. However, items such as pharmaceuticals and electronics are exempt from these duties. Trade experts warn that this escalation could lead to a significant decline in India's merchandise exports to the U. S., with projections indicating a potential drop of up to 45% in 2025–26 compared to the previous year. The affected sectors are particularly vulnerable, as many rely on low margins and large workforces, making them susceptible to the increased costs and reduced competitiveness in the American market.
In response to the tariffs, the Indian government has condemned the U. S. actions as unjustified and has pledged to continue its energy imports from Russia. Prime Minister Narendra Modi emphasized India's strategic autonomy and reiterated the country's right to pursue its energy policies without external interference. Additionally, India is exploring alternative export markets in regions such as Latin America, Africa, Southeast Asia, and the European Union to mitigate the impact of the U. S. tariffs. The government is also considering domestic reforms, including adjustments to the Goods and Services Tax and financial assistance to exporters, to bolster the economy and support affected industries.
The U. S. administration, led by President Donald Trump, has justified the tariffs as a necessary measure to address national security concerns related to Russia's oil revenues. Officials argue that India's oil purchases from Russia contribute to funding the ongoing conflict in Ukraine, thereby posing a threat to global stability. However, critics point out that China, which imports more Russian oil than India, has not faced similar punitive measures, raising questions about the consistency and fairness of the U. S. approach.
The imposition of these tariffs signals a significant shift in U. S.-India relations, which had previously been characterized by growing strategic and economic cooperation. Analysts caution that the trade dispute could have broader implications, potentially affecting joint initiatives in defense, technology, and regional security. The situation remains fluid, with both nations engaged in ongoing diplomatic efforts to address the issues at hand.