US Slaps 25% Tariff on Indian Goods; Govt Reviews Impact, Markets React

🇮🇳🇺🇸 US Imposes 25% Tariff on Indian Goods, New Delhi Studies Response

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New Delhi, July 31 — The United States has announced a 25% tariff plus penalty on Indian exports, effective August 1. The move, announced by former US President Donald Trump, cites India's continued energy and defence trade with Russia and “unfair trade practices.”

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Government Reaction

The Commerce and Industry Ministry confirmed it is reviewing the tariff impact.

“India will take all necessary steps to safeguard national interest,” the ministry said in a statement.

While no retaliatory tariff has been announced, diplomatic channels remain open to address trade concerns.

Market Impact in India

Equity Markets: Pharma majors Dr. Reddy’s and Sun Pharma fell up to 3%; textile and chemical stocks saw pressure.
Currency: The rupee showed mild weakness amid investor caution.
Exports at Risk: Apparel, pharmaceuticals, jewellery, and chemicals face direct exposure to the new duty.

Political Responses

BJP leaders called the decision “unfortunate” but urged patience before India’s formal stance.
Congress accused the Modi government of “paying the price for failed foreign policy” and mishandling trade diplomacy.

What Changes to Expect in India

Diversifying Export Markets: Shift toward ASEAN, Africa, Latin America.
Trade Negotiations: Potential acceleration of India–US trade deal discussions.
Policy Response: Possible countermeasures or WTO appeal if talks fail.
Domestic Push: Increased focus on Make in India and import substitution.

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Conclusion

India’s immediate approach remains strategic and measured, avoiding escalation while studying the tariff’s impact. In the short term, exporters face pressure; in the long term, diversification and new trade pacts are expected to soften the blow.

📌 Official Source: IMD Commerce Ministry Statement