India exporters slam Trump tariff, 50% of Pakistani goods hit in major setback

India’s Exporters Urge U.S. to Rewind 50‑Percent Tariffs

Indian exporters warn that adding a 50% U.S. tariff could make businesses unviable. The warning comes after President Donald Trump intensified levies on Indian goods, doubling the earlier 25% tariff in three weeks.

Key Reactions

• Prime Minister Narendra Modi said he was willing to “pay a great personal price”, indicating a possible personal stake in the trade dispute.
• Opposition leader Rahul Gandhi called the levies “economic blackmail” and an “attempt to bully India”.
• U.S. stocks opened lower, the Nifty index dropped by 0.31% after the first 25% tariff took effect.

Why the Tariff Doubling Matters

India is the second‑largest purchaser of Russian oil, saving billions on discounted crude. The U.S. wants India to cut those purchases, or face higher tariffs.

Export Groups’ Concerns

• S.C. Ralhan, president of the Federation of Indian Export Organisations, said the 50% tariff “is a severe setback,” affecting nearly 55% of shipments to the U.S.
• He warned that many export orders are on hold and small‑to‑medium enterprises could lose profitability in an already thin margin.

Economic Impact Forecasts

Capital Economics’ Shilan Shah noted that the U.S. represents 2.5% of India’s GDP. A 50% tariff could lower India’s growth from 7% to about 6% over the next two years.

Export Sectors at Risk

• Smartphones, drugs, gems, textiles, industrial machinery are top exports.
• Labour‑intensive goods—jewellery and seafood—could see job losses and revenue hits.
• The Seafood Exporters Association flagged a $3 billion business threat.

Political Strains

India has balked at fully opening its agricultural sector to U.S. imports. Modi stated that India will never compromise farmers’ interests. He added that he would pay a personal price, suggesting an impending personal sacrifice.

Broader Context

• India and China are rivals for influence in South Asia.
• Modi might visit China in late August, the first trip since 2018.
• Modi and China’s President Xi met in Russia in October 2024.

Takeaway

The U.S. tariff hike threatens to rout India’s export backbone, affecting everything from technology to seafood. Both political leaders are signaling strong stances, but the economic fallout could reshape India’s position as an emerging manufacturing hub.