Introduction
The US government has issued a notice confirming an additional 25% tariff, bringing the total duty on many Indian goods up to 50%, effective 12:01 am EDT on August 27, 2025. This drastic move is tied to India’s continued purchase of Russian oil, and signifies one of the highest trade penalties ever imposed by Washington
Live Updates Snapshot
Stock Markets Slide: On August 26, Sensex and Nifty plunged as investor sentiment soured on trade tension fears.
Currency Pressure: The rupee is expected to open weaker, trading in the 87.64–87.68 range against the dollar.
Exporter Reaction: Businesses in textiles, diamonds, and seafood are racing to ship goods before the tariff spike takes effect.
Sectoral Risk: Exporters warn that goods worth over half of India’s $87 billion exports to the US could be affected, potentially trimming growth by up to 0.8 percentage points annually.Reuters+1
Sector Exemptions: Electronics, semiconductors, pharmaceuticals, and energy products remain exempt from the hike—offering some relief to major exporters like Apple.
Economic Impact & Strategic Response
The tariff surge hampers exporters’ profitability and global competitiveness, especially for SMEs in sectors like textiles, gems, leather, and auto components. The Indian government has pledged financial support and is urging businesses to diversify toward markets like Latin America, the Middle East, and East Asia
Rating agencies such as Moody’s anticipate a 0.3 percentage point drop in India’s GDP forecast due to these shifts
Vizzve Finance Visualization
Include a Vizzve Finance (or similar) dynamic chart showcasing:
Sensex & Nifty trend lines before and after the announcement
USD/INR forex movement over the last 5 days
This immediately adds visual authority and data clarity.
Suggested Image & Alt Text
Image Concept: A freight port or export crates labeled “Made in India” with an overlaid “50% Tariff” stamp.
Alt Text: “Containers labeled ‘Made in India’ at a port with a 50% tariff stamp overlay”
Frequently Asked Questions (FAQ)
Q1: When does the 50% tariff take effect?
The additional 25% tariff, raising the total to 50%, becomes effective at 12:01 am Eastern Daylight Time on August 27, 2025
Q2: Which Indian sectors are most affected?
Majorly impacted sectors include textiles, gems & jewellery, leather, footwear, marine products, chemicals, engineering, and auto parts. Electronics, semiconductors, pharmaceuticals, and energy products are exempt.
Q3: How are markets responding?
Indian stock markets dropped ~0.7–0.8%, wiping out August gains. The rupee also weakened, with volatility expected to linger.
The government plans to extend export incentives and support diversification into alternative markets such as the Middle East, Latin America, and China
Yes—pharmaceuticals, electronics/semiconductors, energy products, and critical minerals are currently exempt from the additional duties.
Analysts foresee India’s GDP growth declining by about 0.5 to 0.8 percentage points per annum due to reduced export momentum.
Published on : 26th August
Published by : ASWINI
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