🔍 What Is a Tariff?

A tariff is a tax imposed by a country on imported goods or services. For example, when the U.S. applies a 25% tariff on Indian exports, it increases the price of those goods in the American market—making Indian goods less competitive.

📊 U.S. Tariff Rates on Major Countries

*Rates effective from August 7, 2025, under Trump’s executive order. 1

🇮🇳 Impact on India

• Exports at risk: Exports worth ~$85 billion (including textiles, auto-parts, gems & pharma) face a 25% tariff. 2
• Sectoral hit: Garments, jewelry, auto components, and phones will become costlier in the U.S., reducing competitiveness. 3
• Order cancellations: Exporters risk lost contracts as U.S. importers source from lower-tariff nations like Vietnam or Bangladesh. 4
• Trade imbalance concerns: U.S. criticizes India’s high import tariffs and Russia trade ties; discussions on retaliation ongoing. 5
• Strategic disadvantage: India may lose ground in global supply chains compared to countries with lower U.S. tariff rates. 6

💬 Why It Matters

• Price rise: U.S. consumers may end up paying more for Indian imports, reducing demand.
• Export slowdown: India’s export growth may slow, affecting job creation and foreign exchange inflows.
• Policy push: India is under pressure to revisit its agriculture, dairy, and trade barriers to avoid further penalties. 7
• Diplomatic strain: Escalating tariffs could damage U.S.-India relations, complicating broader cooperation. 8