India estimates that 55% of exports will be taxed at 50%

The Indian government estimates that 55% of the total value of its merchandise exports to the United States will be affected by the new 50% tariffs imposed by Washington, according to an official statement presented to Parliament.

"A combination of different factors, such as product differentiation, demand, quality, and contractual arrangements, will determine the impact on India's exports," Indian Finance Secretary Pankaj Chaudhary told the lower house of Parliament in a written response.

In the explanation, released this Tuesday by the Indian news agency PTI, Chaudhary specified the tariff structure, 25% in effect since August 7 and a further 25% from August 27.

Last week, major US retailers such as Walmart, Amazon, Target and Gap requested a pause in shipments from Indian exporters, mainly in the textile sector, due to Washington's imposition of tariffs of up to 50%, according to Indian financial channel NDTV Profit.

Tiruppur Exporters Association (TEA) President A. Sakthivel also confirmed last week the decision of its members to suspend production for the US market.

"We have decided to suspend manufacturing orders for the US until there is clarity," he said at a press conference on Friday.

In a similar vein, the Confederation of Indian Textile Industry (CITI) called the tariff a “huge setback” that will “significantly weaken” the industry’s ability to compete .

India is the fourth-largest apparel exporter to the United States, with a market share of around 6%. Although this figure has grown in recent years, it still lags behind its main Asian competitors: China, which dominates with 21%, and Vietnam, with 19%.

With the new 50% tariff imposed by the United States, India is at a major disadvantage compared to those countries, which face tariffs between 20% and 30%.

While the United States' official justification for imposing these tariffs has centered on India's purchase of Russian oil, in New Delhi, the measure is interpreted as a pressure tactic to unblock the stalled US-India Bilateral Trade Agreement (BTA).

The main sticking points are "red lines" identified by India, such as its refusal to open its market to US agricultural and dairy products as a way to protect millions of Indian farmers.

Chaudhary reiterated in the communication sent to Parliament that the Indian Government “will take all necessary measures to ensure the national interest”.

The United States is India's largest trading partner, with bilateral trade in goods reaching $128.9 billion (€110.9 billion) in 2024.

India's main exports to the US are pharmaceuticals, gemstones and jewelry, machinery, electronics, and textiles.