NEW DELHI: Indian exporters are bracing for a sharp decline in US orders as Washington confirmed steep new tariffs on the South Asian nation’s goods will take effect on Wednesday (Aug 27), escalating trade tensions between the two strategic partners.
An additional 25 per cent duty announced by President Donald Trump, and confirmed in a notice by the US Department of Homeland Security, takes total tariffs to as much as 50 per cent, among Washington’s highest, in retaliation for New Delhi’s increased purchases of Russian oil.
“The government has no hope for any immediate relief or delay,” said a commerce ministry official, who declined to be named. The ministry has promised exporters financial assistance and incentives to diversify into other markets, including China, Latin America and the Middle East.
MARKETS REACT
The Indian rupee fell to a three-week closing low of 87.68 against the dollar, while benchmark equity indexes closed down 1 per cent each, their steepest daily fall in three months.
The new duties will apply from 12.01am EDT on Wednesday (9.31am IST), with exceptions for shipments in transit, humanitarian aid and items under reciprocal trade programmes.
Wednesday’s move follows five failed rounds of talks. Indian officials had hoped tariffs could be capped at 15 per cent. Instead, both sides have traded blame for political misjudgments that derailed negotiations despite two-way trade worth more than US$190 billion.
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