In a sharp escalation of trade tensions, U.S. President Donald Trump on Wednesday announced an additional 25% tariff on Indian imports. The punitive measure is aimed at pressuring New Delhi to curb its continued purchases of Russian crude oil — a move Washington views as undermining its sanctions regime.
With this latest increase, the total U.S. tariff burden on Indian goods now stands at 50%, exceeding the current rate on Chinese imports by 20 percentage points. The steep hike delivers a significant blow to India's export competitiveness, particularly in key sectors like textiles, chemicals, and auto components.
The revised tariff structure, disclosed late Wednesday, is set to come into force after a 21-day grace period, beginning August 27, 2025. This brief window offers a narrow chance for both sides to engage in diplomatic dialogue. However, prospects for a quick resolution appear limited, given current geopolitical strains and India's strategic energy interests.
Investor sentiment took a hit following the announcement. On Thursday morning, Indian benchmark indices opened lower for the third straight session, as markets priced in potential economic fallout from the U.S. tariff move.
As of 9:21 a.m., the BSE Sensex had dropped 266 points, or 0.33%, to 80,359, while the Nifty50 slipped 71 points, or 0.3%, to 24,502.
Market experts anticipate a short-term market decline of 1–2% in response to the tariff shock. However, many remain hopeful that a diplomatic compromise could be reached before the new rates are implemented.
The following sectors and companies are expected to bear the brunt of the new trade measures:
Also Read: Trump Doubles US Tariffs on India to 50%; 21-Day Window for Talks Opens
In addition, any potential reduction in Russian crude imports as part of a negotiated settlement could strain domestic energy supply. Reliance Industries and India’s oil marketing companies (OMCs), key players reliant on affordable Russian oil, may face margin pressures. A significant cut in Russian supply could also trigger a spike in global crude prices, further complicating India's inflation outlook.
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Published on: Aug 7, 2025, 2:09 PM IST
Sachin Gupta
Sachin Gupta is a Content Writer with 6+ years of experience in the stock market, including global markets like the US, Canada, and Australia. At Angel One, Sachin specialises in creating financial content that simplifies complex market trends. Sachin holds a Master's in Commerce, specialising in Economics.
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