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The cumulative tariffs — higher than not just those for India’s export rivals such as Vietnam, but also China — could cut outbound shipments to the US by 60% and shave about 1% from GDP, estimates Bloomberg Economics.
US President Donald Trump’s additional tariffs on India will further damage the South Asian nation’s already slowing economy, and will shrink its gross domestic product by as much as 1%, analysts said. Trump recently doubled tariffs on Indian goods to 50% as a penalty for buying Russian oil, in a move that could make exports to the US of many industries uncompetitive.
The cumulative tariffs — higher than not just those for India’s export rivals such as Vietnam, but also China — could cut outbound shipments to the US by 60% and shave about 1% from GDP, estimates Bloomberg Economics. India’s central bank sees the economy expanding 6.5% in fiscal 2026 — the same as last year and way below the average 8% growth seen before that.
Analysts see the new levies effective in 21 days, hitting exports from labor-intensive sectors such as gems and jewelry, textiles, and footwear, potentially halting business in these goods. The move is also expected to force India to actively scout for alternative markets. New Delhi called the move “unfair, unjustified,” blasting Trump for singling out India when other countries are also buying oil from Moscow.
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Low value addition and slim margins across many industries could make it hard for smaller firms to compete, they added. The US is India’s largest export destination for goods, making up nearly a fifth of total outbound shipments. Citigroup estimates a 0.6-0.8 percentage point downside risk to annual growth from the higher tariffs.
