US Issues Notice On Additional 25% Tariffs On India

By Deepak Arora

WASHINGTON, Aug 26: The Donald Trump administration has officially issued a notice regarding the imposition of an additional 25 per cent tariffs on Indian imports, with the punitive duties set to kick in at 12:01 am (EST) on August 27.

The notice, issued by the Department of Homeland Security, stated the new levies were in response to "threats to the United States by the Government of the Russian Federation," and India was being targeted as part of that policy.

An additional 25% duty announced by President Trump takes total tariffs to as much as 50%, among Washington's highest, in retaliation for New Delhi's increased buying of Russian oil.

On Tuesday, the Indian rupee fell to a three-week closing low of 87.68 against the dollar, despite recovering some ground after suspected central bank intervention to support it.

The benchmark equity indexes (.NSEI), opens new tab and (.BSESN), opens new tab closed down 1% each, for their worst sessions in three months.

Wednesday's tariff move follows five rounds of failed talks, during which Indian officials had signalled optimism that tariffs could be capped at 15%.

Officials blamed political misjudgment and missed signals for the breakdown in talks between the world's biggest and fifth-largest economies, whose two-way trade is worth more than $190 billion.

Exporter groups estimate hikes could affect nearly 55% of India's merchandise exports worth $87 billion to the United States, while benefiting competitors such as Bangladesh, China and Vietnam.

India's diamond industry exports have already hit a two-decade low on weak Chinese demand, and the higher tariffs now threaten to cut it off from its largest market, taking nearly a third of $28.5-billion annual shipments of gems and jewellery.