US Hits Indian Goods With 50% Tariff Over Russian Oil Purchases

The U.S. government has implemented a steep 50% tariff on a wide range of Indian exports, a move that is set to squeeze American importers and likely raise prices for consumers on goods ranging from apparel to seafood. The new import tax, which took effect August 27, 2025, is a direct response to India's continued purchases of Russian oil.

The tariffs are expected to hit U.S. companies in labor-intensive sectors particularly hard. Industries reliant on Indian manufacturing, such as textiles, gems and jewelry, leather goods, and footwear, now face sharply higher costs. According to the Office of the U.S. Trade Representative, goods imported from India were valued at over $85 billion in 2024, highlighting the significant volume of trade now under pressure.

For American consumers, the impact may soon appear on price tags. With India being a leading supplier of items like shrimp, spices, and textiles, U.S. companies are already seeking alternative suppliers in countries like Vietnam, Bangladesh, and Ecuador, which could disrupt supply chains and increase costs.

The move has sent shockwaves through Indian export industries. "The entire industry is in trauma," said Kirit Bhansali, chairman of India's Gem and Jewelry Export Promotion Council, who noted the sector's thin profit margins. Indian trade groups have warned that the tariffs render their goods uncompetitive, reporting that some textile and apparel manufacturers have already halted production.

While the U.S. administration aims to penalize India for indirectly funding Russia's war in Ukraine, the policy has strained the strategic relationship between the world's two largest democracies. Indian officials have called the move 'unjustified,' pointing to Europe's extensive trade with Russia. Not all goods are affected; notable exemptions include pharmaceuticals, electronics, and smartphones, sparing some key areas of trade between the two nations.