The move has sent shockwaves through India’s trade and diplomatic corridors, with former officials warning that Indo-US trade could grind to a halt if the tariffs are enforced.
Former Finance Secretary S.C. Garg expressed deep concern over the consequences, stating that even the earlier 25% tariffs had halved India’s exports to the US “At 50%, no trade takes place. Trade is off the table completely, as far as India and the US are concerned if these tariffs kick in,” he said.Garg added that India is unlikely to meet Trump’s demands and may have to redirect exports or boost domestic consumption until US consumers push back and trigger a reversal of the policy.
Read Here | President Trump imposes an additional 25% tariff on Indian imports over Russian oil trade
Echoing similar concerns, Ajay Sahai, Director General & CEO of the Federation of Indian Export Organisations (FIEO), called the tariff hike “shocking and disappointing.” He warned that Indian exporters will be priced out of the US market. “With our competitors facing only 15–20% duties, Indian products will be costlier by about 35%.
No segment has that kind of margin,” he said. While about 45% of India’s exports under Section 232 exemptions might be spared, the remaining 55% face severe impact.
As the countdown to the 21-day resolution window begins, India now faces a diplomatic deadlock with limited room for manoeuvre — a situation that could redefine the future of one of the world’s most important bilateral trade relationships.
Adding to the chorus of concern, former Indian Ambassador to the WTO Anjali Prasad emphasised that President Trump’s actions on trade are fundamentally unlawful.
She believes India should not face this challenge in isolation. Instead, she advocates for a coordinated response with other like-minded nations and trading partners who have been similarly targeted. According to her, collective discussions and a unified strategy are essential to push back effectively against what she views as trade anarchy being unleashed by the U.S. administration.
She also cautioned against any form of compliance with these tariff demands, arguing that conceding now would only invite further escalations — today it may be 50%, tomorrow it could be 100%, with no end in sight.
Rajiv Kumar, former Vice-Chairman of NITI Aayog, suggested that the tariff escalation may be less about punishing India for importing Russian oil and more of a negotiating tactic from the US side. Based on discussions in Washington, he believes the negotiations are being taken seriously and have even gone into sector-specific details.
In his view, unless the US is demanding something that crosses a firm red line—such as zero tariffs on sensitive items like grains—India should evaluate the demands carefully and remain open to a negotiated settlement.
Kumar warned that if the 50% tariffs go through, India risks losing access to a US export market worth nearly $100 billion. He urged policymakers to engage proactively and explore the possibility of a deal, considering President Trump’s well-known preference for striking agreements on his terms.
