Trump Tariff Live Updates: India-US hold informal talks, no plans to retaliate: Report

“This is a complicated relationship. President Trump and Prime Minister Modi have a very good relationship at that level. It’s not just over the Russian oil,” Bessent told Fox Business in an interview. “The Indians came in early after Liberation Day to start negotiating on tariffs and we still don’t have a deal. I thought we would have a deal in May or June. I thought India could be one of the earlier deals and they kind of tapped us along in terms of the negotiations and then there is also the aspect of the Russian crude purchases, which they’ve been profiteering on. There’s many levels going on here,” he added.

In an interview with Fox Business, US Treasury Secretary Scott Bessent expressed confidence in the relations between Washington and New Delhi and said that both the countries “will come together” eventually. Bessent’s reaction comes as India is imposed with 50% tariffs from the American government on all its goods.

“I do think India’s the world’s largest democracy, the US is the world’s largest economy. I think at the end of the day we will come together,” he said. Bessent also said that India’s reaction on the issue of tariffs has been “performative” so far.

Former JNU professor and economist Utsa Patnaik on Wednesday suggested a way forward after the United States imposed 50% tariffs on India. Patnaik said that a boycott of foreign products, similar to the historical ‘Swadeshi Movement’, could be a way for India to counter the pressure.

Patnaik added that the tariffs being imposed by Trump are a reflection that the American consumers are in crisis.

“His actions reflect the fact that US consumers are in a state of crisis. Joe (Joseph) Stiglitz has estimated that the real wage of the American worker has actually gone down during the neoliberal era. They themselves feel that they can no longer consume at the same rate as before, as they were doing earlier,” Patnaik said.

Stiglitz is an American economist, a public policy analyst, and a professor at Columbia University.

– via PTI

President of the Associated Chambers of Commerce and Industry of India Sanjay Nagar told ANI that Indian industries have a “proven track record” of adapting to changing landscapes.

“The 50% US tariff is undoubtedly a challenge, but Indian industry has always thrived under pressure. Our businesses have a proven track record of adapting quickly, innovating and expanding into new frontiers,” Nagar said.

“Exporters across textiles, gems & jewellery, agriculture and shrimps face steep duties, yet they are accelerating diversification into Africa, Latin America, Europe and ASEAN, while strengthening competitiveness at home. With strong government support, this disruption will not weaken India’s trade ambitions, it will only strengthen India’s resolve toward resilience, self-reliance and global leadership,” he added.

Minister of State for External Affairs, Kirti Vardhan Singh on Wednesday called the US-imposed tariffs on India as “totally unjustified and unfair”. “Because the reasons that have been given to us, those same causes, those same reasons apply to many other countries, but the tariffs have been selectively imposed on us, so that’s why I say they are unreasonable, unjustified and unfair,” Singh told ANI.

“But our economy is strong enough, our government will protect the interests of our country and we will continue to look at markets for all resources because we have a very large population whose energy security also has to be addressed,” he added.

A look at sector-wise tariffs imposition:

The United States’ steep 50% tariff on Indian goods could climb as high as 63.9% for some sectors while remaining as low as 3.85% for others. The textile and apparel industry is set to be the worst hit. Knitted apparel will face an effective duty of 63.9%, while non-knitted apparel will attract 60.3%. Textiles exports will now come under a duty of nearly 59%.

Full story here: US tariffs soar to 63.9% for some sectors; 10 sectors face over 50% duty

GTRI founder Ajay Srivastava, a former Indian trade official, told Reuters that even if India eventually gets some of the tariffs reversed, several consequences, especially in trade, will remain.

“Competitors like China, Vietnam, Mexico, Turkey and even Pakistan, Nepal, Guatemala and Kenya stand to gain, potentially locking India out of key markets even after tariffs are rolled back,” Srivastava said.

Former Niti Aayog CEO and former G20 Sherpa Amitabh Kant called out the hypocrisy of the US administration on Wednesday. Kant said that the 50% US tariffs should be a “wake-up call for India”.

“The irony is striking: the U.S. is actively negotiating with Russia and China, the latter being the largest buyer of Russian oil, yet chooses to target India with tariffs instead. Let us be clear, this is not about Russian oil,” he posted on X.

The former Niti Aayog head said India has shown in the past that it does not get intimidated amid global pressures and this time “should be no different”.

“It is about India’s energy security and strategic autonomy, which we should never compromise. India has, on numerous occasions, refused to yield to global pressure. This moment should be no different. Rather than intimidate us, these global headwinds must galvanise India into bold, once-in-a-generation reforms, while also diversifying our export markets to secure long-term growth and resilience,” Kant wrote.

India, meanwhile, is caught between its dependence on Russia for cheap oil, defence supplies and diplomatic support, and its strategic partnership with the US, crucial for countering China in the Indo-Pacific.

Why India needs Russia?

– Russian crude accounts for roughly 40% of India’s total oil imports, up from almost zero before the Ukraine war

– Immediate cessation of Russian oil imports would be economically unfeasible and could push global crude prices to around $200 per barrel

– India discounts Russian oil by up to 7% compared to global benchmarks

India has accused Washington of double standards for penalising its Russian oil trade while continuing purchases of Russian uranium and other commodities.

India’s diplomatic dilemma

While India values Russia for defense equipment, cheap oil, geopolitical support and political backing on sensitive issues, the US remains Delhi’s most important strategic partner, especially in countering China’s influence.

In a step towards repairing the relationship with Washington, which is potentially headed towards its lowest point since 1998 US sanctions, India is considering increasing US energy purchases. However, Modi government is reluctant to fully stop Russian oil imports at this point.

Since early 2022, India has saved an estimated $17 billion by increasing imports of discounted Russian oil after the Ukraine war. These savings are now under the threat of being wiped out as US-imposed 50% tariffs on Indian goods come into effect from today.

According to GTRI, this move could slash exports by over 40%—nearly $37 billion this fiscal year—posing major risks to jobs in labour-intensive sectors like textiles, gems and jewellery.

India is hopeful that the U.S. will review the additional 25% tariff imposed on Indian goods as penalty for its Russian oil purchases, a government source told reporters on Wednesday.

The Indian government is holding talks with exporters to increase shipments of textiles, leather, gems and jewellery to other countries, and is likely to provide financial assistance to affected businesses, the source said.

– via Reuters

For 38-year-old V Dinesh Kumar, a small apparel manufacturer from Tiruppur on the banks of Tamil Nadu’s Noyyal river, a long-feared nightmare recently turned real. His debut export order from a US buyer was cancelled overnight with a curt email, wiping out months of effort and nearly Rs 50 lakh he had invested in fabrics, accessories and expanding capacity. “It’s a huge blow for a company of our size,” says Kumar, who runs Woodrose Apparel, a micro enterprise employing about 70 workers. The unit specialises in cotton infant wear.

Kumar’s story reflects the anxiety gripping Tiruppur, India’s knitwear capital. Units here export around Rs 45,000 crore worth of apparel annually, with over half bound for the US. That model has been jolted by Washington’s recent decision to slap a 50% tariff on Indian goods, a move expected to hit over 2,500 exporters and nearly 20,000 standalone units. With 96% of them being small and medium enterprises, industry insiders fear widespread cancellations, financial strain and job losses in the coming months.

Ground report: In this knitwear hub, as the rhythm of looms withers way, an easy silence sets in

The Commerce Ministry will this week hold a series of meetings with exporters from key sectors such as chemicals, gems and jewellery to explore strategies for expanding into new markets and mitigating the impact of steep US tariffs, a PTI report quoted an official as saying.

The United States has imposed a 50% tariff on Indian goods with effect from August 27. The tariff hit, highest globally, is expected to impact exports worth over $48 billion.

“In the next two to three days, the ministry will meet stakeholders on the diversification of exports,” the official said, adding that work is also progressing on the government’s proposed Export Promotion Mission, announced in the Union Budget for 2025-26.

The consultations are aimed at assessing sector-specific challenges and identifying potential markets to help industries cushion the blow of higher duties in the US, India’s largest export destination.

(With PTI inputs)

The European Union is pushing to fast-track legislation to remove all tariffs on US industrial goods by the end of the week. This comes in response to a demand from President Donald Trump, who has insisted that the US will only lower its tariffs on EU car exports once this is done, Bloomberg News reported on Wednesday

The Commerce Ministry plans to hold several meetings this week with exporters from sectors like chemicals and gems and jewellery. The goal is to find ways to expand into new markets and protect industries from the steep 50% US tariffs on Indian goods, an official said. Work is also moving quickly on the Export Promotion Mission announced in the 2025-26 Budget. In the next few days, the ministry will discuss export diversification with key stakeholders. The new 50% tariff, effective from today, is expected to affect Indian exports worth over $48 billion.

Rating agency ICRA expects Indian companies to see modest revenue growth of 5 to 6% in the 2nd quarter of the fiscal year, slightly higher than 5.5% in the previous quarter. With input costs like crude oil and coal softening, operating profit margins are expected to stay steady at around 18 to 18.2% compared to last year. Credit conditions are likely to remain stable, with the interest coverage ratio estimated at 4.9 to 5.1 times, up slightly from 4.9 times in the first quarter.

India and Russia have agreed to raise their annual trade by 50%, targeting $100 billion over the next five years. Since the time Russia’s invasion of Ukraine in 2022, India has increased its oil imports from Russia and now buys around 37% of Russian oil exports. Indian companies briefly paused their Russian oil purchases in early August but have resumed buying in the following weeks.

India’s worsening relationship with the US has pushed it to strengthen connections with other BRICS countries. In recent months, India and China have worked to improve ties after the 2020 border clashes. PM Modi is expected to meet Chinese President Xi Jinping next week during a security summit in China, marking his first visit there in seven years.

According to Santosh Meena, Head of Research at Swastika Investmart, “The technical structure of the Nifty and Bank Nifty indices has weakened considerably after they slipped below key support levels. This indicates a high probability of further downside.”

Meena said the Nifty 50 index is likely to remain under selling pressure and could retest its 200-Day Moving Average (200-DMA) around the 24,050 level in the near term. For the trend to reverse, the Nifty must decisively regain and sustain the 25,000 level.

For Bank Nifty, “the banking index is also underperforming and has broken its recent consolidation range. A break below the crucial support around 55,000 could accelerate the decline, with the next major support zone around the 54,000-53,500 levels,” Meena said.

The Ministry of Finance has said that the new US tariff will affect 55% of India’s goods exports to the US. However, some private agencies and export groups estimate the impact could be even larger. The Delhi-based trade think tank GTRI said about two-thirds of Indian exports to the US will now face tariffs of 50% or more, hitting labour-intensive sectors like textiles, garments, seafood, and gems and jewellery hard. India exported nearly $87 billion worth of goods to the US in 2024. Even though exports grew 21% between April and July this year, they could fall below $50 billion by the end of the financial year.

Read More Here | Trump Tariff Shock: FY26 shipments may plunge 43% to $50 billion

Crisil ratings agency has warned that the uncertainty caused by the US tariffs may affect investment decisions in India this financial year. The additional 25% tariff on Indian goods, triggered by purchases of Russian oil, came into effect recently, bringing the total US levies on India to 50%.

The ratings agency noted that while the government has been driving investments, private companies’ capital spending has remained low. The new tariffs are expected to hurt business sentiment, even though many companies have strong balance sheets that may support fresh investments.

The agency highlighted that the FTA may help in restoring investor confidence by lowering tariffs and creating predictable trade rules. As of late August, US tariffs on India are higher than those on Bangladesh, Vietnam, and Indonesia, making Indian exports less competitive.

Congress MP Manickam Tagore criticised Prime Minister Modi, saying India has faced huge export losses after the US imposed a 50% tariff. He pointed out that farmers, small businesses, and exporters are the worst affected. The MP highlighted that textile hubs like Thiruppur, Surat, and Noida could see up to 500,000 job losses. The gems and jewellery sector may lose around 200,000 jobs, and the livelihoods of 3 million shrimp farmers in Andhra Pradesh are at serious risk. Tagore blamed the situation on Modi’s foreign policy approach and claimed that the strong friendship with the US, promoted through slogans abroad, has backfired economically.

Amid global uncertainties and rising tariffs, India needs to focus on innovation and sustainable practices to reach its $100 billion target in textiles. Experts say investing in man-made fibres and performance fabrics is especially important, as over 60% of the world’s fibre demand now comes from MMF.

Government initiatives like the PLI scheme for MMF apparel and technical textiles provide an opportunity to scale up production and create future-ready capacity. Industry leaders also stress the need to use energy-efficient machinery, properly manage effluents, and turn waste into value. These steps not only help meet ESG standards but also reduce operational costs, making the sector more competitive globally.

The Chamber of Trade and Industry (CTI) has said that the new 50% US tariff could affect over $48 billion of Indian exports. Engineering goods, which earned Rs 1.7 lakh crore last year, are expected to be hit hard. Gems and jewellery exports worth Rs 90,000 crore and India’s growing electronics shipments also face serious risks.

Products that earlier had a 10% tariff will now face 50% tariff, making them much more expensive for US buyers. Pharmaceutical exports, valued at Rs 92,000 crore last year, will also face challenges.

Medicines that were previously duty-free will now cost 50% more, putting Indian pharma firms at a disadvantage compared to other suppliers like Vietnam.

The Chamber of Trade and Industry (CTI) has warned PM Narendra Modi that the 50% US tariff could severely hurt India’s major industries and put millions of jobs at risk, reported news agency ANI. CTI highlighted that sectors like textiles, leather, gems and jewellery, auto components, chemicals, pharmaceuticals, seafood, and electronics will face the worst impact. With the higher tariffs, Indian products could become up to 35% more expensive than competitors in the US, pushing buyers to source from other countries.

India is expected to keep buying Russian oil to ensure energy security, sources say, reported Reuters. However, imports are likely to drop in September after state refiners paused purchases due to smaller discounts, according to trade data.

Refiners are now only looking for distressed cargoes as discounts on Russian Urals crude have shrunk to about $2.50 per barrel compared to $20–$25 per barrel when the war began in February 2022. Officials note that replacing Russian oil would be costly, making it hard for India to fully shift to other sources.

Since the Ukraine war began in 2022, India and China have become the largest buyers of Russian oil as Western countries avoided Moscow and set price caps on its oil. There is no complete ban on Russian oil if transactions follow Western sanctions rules. India imports discounted Russian oil to lower its huge crude import bill and provide affordable energy to its 1.4 billion people, as per a Reuters report. This also helps the country diversify away from more expensive Middle Eastern Oil. Guided by national interests, India imports over 85% of its crude needs to feed its refining capacity of 5.2 million barrels per day.

Garments and textiles, which send over 35% of exports to the US, and shrimp exports worth $2.5 billion, now face tariffs up to 56%, GTRI founder Ajay Srivastava said. These sectors are expected to suffer the most. To cope, Indian exporters have two main options: focus on the domestic market or look for new international buyers. The government is working on free trade agreements with other countries to help reduce the impact of these tariffs.

The US is a major market for several Indian exports like diamonds, gems, and gold jewellery, for example, rely on the US for around 40% of global exports, GTRI founder Ajay Srivastava said. Previously, tariffs were only 2–3%, but now these goods will become much more expensive, giving an advantage to competitors from countries like Thailand.