Indian Exporters Warn of Major Losses as Trump Imposes Steeper Tariffs Over Russian Oil Purchases

Indian exporters have voiced serious concerns over the viability of their businesses after former U.S. President Donald Trump ordered additional tariffs on Indian goods in response to New Delhi’s ongoing purchases of Russian oil.

On Thursday, Indian stocks dipped slightly, with the benchmark Nifty index falling by 0.31 percent as the initial 25 percent tariff came into effect.

The duties are set to double to 50 percent within three weeks, following Trump’s signing of an executive order on Wednesday. The measure targets India’s continued import of Russian crude — a key revenue stream for Moscow amid the war in Ukraine.

India, the world’s second-largest importer of Russian oil, has saved billions through discounted purchases, but this strategy has drawn criticism from Washington.

India’s Ministry of External Affairs condemned the new tariffs, calling them “unfair, unjustified, and unreasonable.”

S.C. Ralhan, president of the Federation of Indian Export Organisations (FIEO), warned that the tariffs pose a major threat to exporters, particularly as 55 percent of Indian shipments to the U.S. are directly impacted.

“The 50 percent reciprocal tariff places our exporters at a 30–35 percent disadvantage compared to countries facing lower or no similar levies,” Ralhan said. He added that many export orders have already been paused as international buyers reconsider their sourcing strategies.

For many small and medium-sized enterprises, he explained, profit margins are already slim, and absorbing such a steep increase in costs would be unsustainable.

India, the world’s fifth-largest economy and most populous nation, relies heavily on trade with the U.S., which imported $87.4 billion worth of goods from India in 2024.

According to Shilan Shah of Capital Economics, if the extra 25 percent tariff remains, India’s appeal as a rising manufacturing hub could be severely damaged. U.S. consumer demand contributes roughly 2.5 percent to India’s GDP, Shah noted, and the impact of a 50 percent tariff could reduce India’s economic growth to around six percent annually — down from the previously projected seven percent.