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Business Standard

Trump's 25% tariff on India: What it means for students and skilled workers

Last week, US President Donald Trump signed an executive order updating 'reciprocal' tariff rates that had been paused since April. Nearly every American trading partner now faces tariffs ranging from 10 per cent to 50 per cent. For India, the rate stands at 25 per cent, with a further risk of penalties tied to its trade dealings with Russia. The question many are now asking—how will this trade war impact Indians planning to study or work in the United States? President Trump's tightening grip on immigration and foreign students has become a cause of concern. Dreamers, international students applying for visas, and those hoping to work in the US post-graduation are all feeling the squeeze as the administration clamps down on universities and pushes back against global talent. 'Everything is so interconnected these days. India's soft power itself is a major advantage, a trade plus, if you will, that the country enjoys over others. So, yes, I do believe the current situation could escalate and spill over into various policy areas—not just F-1, H-1B, or B-1/B-2 visas. It could even touch EB categories. EB-5, I'm not entirely sure, but most other categories are likely to get caught up. They'll end up being affected, directly or indirectly,' said Ajay Sharma, founder of Abhinav Immigration Services, speaking to Business Standard. While the tariff hikes themselves don't directly target Indian students, Sharma explained that the damage often lies in perception. 'There's no direct impact from the tariff hikes. But what tends to happen in such scenarios—and this is quite unfortunate—is that the destination starts getting a negative image,' he said. 'That perception really influences students' future plans. We saw this with Canada recently, and the same could unfold with the US. Already, students are stuck waiting endlessly just to get a visa appointment. Add to that the overall uncertainty, and it's not a good look,' Sharma added. The rupee's weakening against the dollar adds another layer of financial strain, though Sharma believes it's not the most critical hurdle. 'The rupee's depreciation will, of course, hit students' pockets, but perhaps not as severely. That's because the rupee is weakening against most major currencies, not just the dollar. So while it's a factor, it might not be the biggest hurdle for students eyeing the US. What's more worrying is the combination of rising costs, bureaucratic delays, and the growing sense of diplomatic friction between India and the US. That mix creates a perception problem, and once that sets in, it becomes a serious deterrent for students and even businesses,' he said. Nikhil Mudgal, founder and CEO of Lorien Finance, echoed similar concerns. 'With the rupee continuing to weaken and the recent tariff adding to the cost of education in the US, Indian students are indeed feeling the financial pinch,' he said. Mudgal added, 'The need of the hour is transparent, cross-border financing options that don't add to the burden, but genuinely enable global aspirations.' US campuses losing their appeal? Fanta Aw, CEO of the international education group NAFSA, painted a grim picture of the mood among students. 'International students and their families seek predictability, security, and a welcoming environment when choosing where to study,' said Aw in a blog post on NAFSA. 'The US government's recent actions have created an atmosphere of fear and confusion that has students, scholars, and their families understandably concerned about their safety and future in the United States. These actions by the government will likely result in prospective students choosing to study elsewhere and current students accelerating the completion of their degrees so they can return home sooner. Students have many options when it comes to study destinations,' Aw added. Impact on global student mobility may be deeper than it looks Market intelligence group ICEF Monitor expects the fallout from Trump's policies to ripple across global student flows. They note several possible shifts: • Less demand for studying in the US, as students fear visa refusals, revocations, or even detentions if an ICE officer finds their views or activities to be 'contrary to US interests'. • Rising hesitation among students from minority backgrounds, including non-white, LGBTQ+, and other marginalised groups, due to Trump's assault on DEI (diversity, equity, and inclusion) programmes. • A broader slump in study abroad volumes, as the administration's reduction of aid to developing countries forces governments to divert funds from education to health sectors. • Student interest moving to alternative destinations, including Canada, Europe, UAE, Saudi Arabia, and even Russia, as the US's global standing continues to wobble. A year ago, IDP Education data had shown the US regaining student demand lost by Australia, Canada, and the UK due to their restrictive visa policies. ICEF believes that trend may now reverse. 'The US may join those other leading destinations in losing share of international students. Great numbers of Asian students may favour other Asian countries, including China, for study abroad, and more EU students may choose to stay within their region as well,' ICEF Monitor noted. Indian workers in tariff-hit sectors could face indirect job hurdles The ripple effects aren't limited to students. Indian workers, especially in sectors like manufacturing or IT hardware—industries directly hit by tariffs—could face subtle disadvantages when it comes to visa sponsorships or job placements. Sharma believes companies aren't planning their hiring purely around visa constraints, but geopolitical strains do make a difference. 'You know, it's not all Indians, because the way I see it, the technology companies do not work or plan their hiring by only visa situations. As the recent layoffs indicate and statements from companies like Microsoft and Google show, when they laid off people, it included not only Americans but even hedge fund workers. So they need people to work, and for how long they'll survive without India's soft power?' Sharma said.