U.S. Plans 50% Tariffs on Indian Products from August 27

The U.S. Customs and Border Protection (CBP) has issued a draft notice regarding the imposition of additional duties on products imported from India. This move follows U.S. President Donald Trump’s announcement to raise tariffs on Indian goods to 50%, citing national and geopolitical interests.

The draft notice, scheduled to be officially published on August 27, 2025, outlines the implementation of these higher tariffs. According to CBP, the Secretary of Homeland Security has determined the need to modify the Harmonized Tariff Schedule of the United States (HTSUS) in line with the executive order.

Background: Executive Order 14329

The additional duties are being enforced to give effect to Executive Order 14329, titled “Addressing Threats to the United States by the Government of the Russian Federation”, issued on August 6, 2025. The order specifies a new duty rate on products imported from India.

CBP clarified that starting from 12:01 a.m. Eastern Daylight Time on August 27, 2025, the new 50% tariffs will apply to all Indian products either entered for consumption in the U.S. or withdrawn from warehouses for consumption.

Previous Tariff Hikes and Rationale

Earlier, on July 30, 2025, President Trump announced an additional 25% tariffs on Indian goods. In a post on Truth Social, he highlighted that:

• India’s tariffs are among the highest in the world.

• The country imposes complex non-monetary trade barriers.

• India has been a major buyer of military equipment and energy from Russia, especially during the Ukraine crisis.

Trump stated that India would now face a 25% tariff plus additional penalties, effective August 1st, 2025, citing these reasons as justification for the trade action.

Indian Government Response

Prime Minister Narendra Modi responded by emphasizing the protection of small entrepreneurs, farmers, shopkeepers, and livestock rearers. During an event in Ahmedabad, he inaugurated and laid the foundation stone of development works worth Rs 5,400 crore.

PM Modi said:

“From the soil of Ahmedabad, I want to affirm that the welfare of small entrepreneurs and farmers is paramount. We will not allow any harm to their interests.”

He further added that despite external pressures, India will continue strengthening its economy under the Atmanirbhar Bharat Abhiyan, with Gujarat being a key contributor to national self-reliance.

Industry Reaction to U.S. Tariffs

Indian trade bodies have expressed disappointment over the 25% tariffs and additional penalties, calling them a setback for Indian exports.

• Some industry leaders warned of short-term disruptions in trade.

• Others highlighted potential opportunities for export diversification and supply chain realignment.

• Sectors like pharmaceuticals, medical equipment, and manufacturing are expected to withstand the impact, owing to India’s robust industrial base.

Experts noted that while the tariff hike poses challenges, it could also incentivize Indian exporters to forge new global trade partnerships beyond the U.S.

Possible Economic Implications

The new 50% tariff is likely to impact the competitiveness of Indian products in the U.S. market. Exporters may need to explore alternative markets or increase domestic value addition to remain profitable.

At the same time, Indian policymakers and industry bodies are evaluating measures to mitigate risks while maintaining the momentum of India’s export growth and Atmanirbhar initiatives.

The situation underscores the geopolitical and economic complexities influencing trade policies and highlights the importance of resilient supply chains for Indian businesses.