US Imposes Blanket 25% Tariff on Indian Goods Starting August 7

The United States will begin collecting a 25% reciprocal tariff on all Indian-origin goods starting August 7, 2025, under a new executive order titled “Further Modifying the Reciprocal Tariff Rates.”

This move places India among the most heavily impacted nations in the revised US tariff regime.

Key Highlights:

No Product-Level Exemptions for India:
Unlike other trading partners, India has been denied exemptions even for critical sectors such as pharmaceuticals, energy products, electronics, and semiconductors.

Transit Exemptions Until October 5:
Shipments that leave Indian ports before August 7 or are already in transit will be exempt from the 25% tariff until October 5. These goods will continue to attract the previously imposed 10% duty.

Tariff Range Across Countries:
The executive order outlines tariffs ranging from 10% to 41% for nearly 70 countries. India’s 25% rate is among the highest, with only a few countries like Laos, Myanmar (40%), and Syria (41%) facing steeper duties.

Geopolitical Context:
The order follows President Trump’s criticism of India’s trade practices and its continued defense and energy ties with Russia. He accused India of maintaining “strenuous and obnoxious non-monetary trade barriers” and expressed frustration over its limited business engagement with the US.

Impact on Indian Exports:
Quick estimates suggest that India’s exports to the US could fall 30% in 2025-26 to $64.6 billion, down from $86.5 billion in 2024-25. Sectors expected to be most affected include petroleum products, pharmaceuticals, and electronics, which have high import content and low domestic value addition.

India’s Response:
The Indian government is currently assessing the implications of the executive order. Commerce Minister Piyush Goyal stated that the Ministry is engaging with exporters and industry stakeholders to formulate a response