With Trump's 25% Tariff Imposed, How Much More Could India Lose If Russian Oil Is Next?
According to an internal government assessment, the new measures directly affect nearly $64 billion worth of Indian exports to the United States, roughly 80% of total outbound goods to the country. Four senior officials, familiar with the matter, confirmed the estimates.
'The impact is real and immediate,' said one of the sources, flagging potential export losses due to price disadvantages.
India exported around $81 billion worth of goods to the United States in 2024. Sectors such as garments, pharma, petrochemicals, gems and jewellery now stand at risk of losing their edge in the global market, especially when competing against countries not facing such steep tariffs.
The government has acknowledged the looming fallout. 'The erosion of price competitiveness is already visible,' said another official, pointing to intensified rivalry from nations facing lower duties.
The high-value items now caught in this tariff net had so far enjoyed relative strength in the U.S. market.
Trump on Tuesday declared that the 25% tariff would rise 'substantially within 24 hours' and followed through. On Wednesday, he announced his administration would finalise the Russian oil penalty after assessing progress on its Ukraine policy push.
Last week, Trump lumped India with Russia, calling both 'dead economies' and accusing New Delhi of maintaining unfair trade barriers and backing Moscow through energy purchases. The rhetoric found sharp resonance in the new trade measures, signalling a hard pivot in U.S.-India economic ties.
Despite the escalation, the Reserve Bank of India stayed firm. In a post-policy meeting on Wednesday, it left GDP growth forecasts unchanged at 6.5% for the current fiscal year. Interest rates also remained steady.
RBI Governor Sanjay Malhotra addressed the brewing storm by stating, 'We are contributing about 18% to global growth, more than the United States, which is contributing about 11%,' he said.
He dismissed the 'dead economy' label and pointed to India's momentum. He also cited International Monetary Fund (IMF) figures projecting India's 2025 growth at 6.4%, compared to America's 1.9%.
India's global goods exports stood at $443 billion in 2024, with the United States accounting for nearly a fifth of that. The latest penalties threaten to drag down a major chunk of this pipeline.
The internal trade impact report emphasises that losses may not only come from reduced volumes but also from long-term erosion in market share. Sectors that had steadily built footholds in the American market now face re-evaluation and possibly redirection.
As of now, India is holding its line diplomatically while crunching numbers and exploring trade alternatives. But with Trump's tariff hammer already falling, the damage may already be underway.
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