2LT National News

WASHINGTON/NEW DELHI: U.S. tariffs on Indian imports doubled to as much as 50 percent on August 27, intensifying a trade clash between Washington and New Delhi even as the two governments continue to describe each other as vital security partners.

The higher duties come from a 25 percent levy imposed earlier this year on Indian goods due to New Delhi’s purchases of Russian oil, added on top of an existing 25 percent tariff on many products. The result is a combined tariff rate of up to 50 percent on items ranging from garments and jewellery to furniture, sporting goods, footwear, and chemicals. These are some of the steepest duties the U.S. has imposed, on par with levels applied to China and Brazil.

Thousands of small exporters, particularly in Prime Minister Narendra Modi’s home state of Gujarat, are expected to be hit hard. A Commerce Ministry official said the government would provide assistance and encourage exporters to diversify into markets such as China, Latin America, and the Middle East.

A U.S. Customs and Border Protection notice to shippers allows a temporary reprieve: Indian goods already en route before the midnight deadline can still enter at the previous tariff rates until September 17. Some products, including steel, aluminum, passenger vehicles, copper, and goods already covered under Section 232 national security tariffs, remain subject to separate duties of up to 50 percent and are unaffected by the latest changes.

India currently applies an average tariff of about 7.5 percent on U.S. imports, though Washington highlights far higher rates on certain goods, up to 100 percent on autos and an average of 39 percent on farm products.

The tariff hikes followed five rounds of negotiations that failed to produce a compromise. Indian officials had hoped to secure a cap of 15 percent, similar to what Japan, South Korea, and the EU receive, but U.S. officials confirmed late on August 26 that the increases would proceed. “Yeah,” White House trade adviser Peter Navarro said when asked if the tariffs were moving forward, offering no further explanation.

According to exporter groups, the collapse in talks leaves about 55 percent of India’s US$87 billion in exports to the U.S. exposed, with competitors like Vietnam, Bangladesh, and China poised to benefit. Analysts warn that sustained tariffs could undercut India’s ambitions to position itself as a manufacturing alternative to China, particularly for electronics and smartphones.

Despite the standoff, both countries emphasized their broader relationship. On Tuesday, the U.S. State Department and India’s Ministry of External Affairs issued identical statements noting that senior officials had met virtually and reaffirmed their commitment to strengthen ties and to the Quad grouping with Japan and Australia.