Indian exporters are preparing for the impact after the US Department of Homeland Security confirmed in a notice that the Donald Trump administration will impose a further 25 per cent duty on all Indian-origin products from August 27 as part of measures to increase trade pressure on New Delhi.

With this decision, India is now among the world’s highest-tariffed countries, along with Brazil, facing export duties of 50 per cent on all its products.

"To implement the President's Executive Order 14329 of August 6, 2025… which imposed a particular rate of duty on imports of articles that are products of India, the Secretary of Homeland Security has determined that proper action is required to amend the Harmonized Tariff Schedule of the United States (HTSUS) as provided in the Annex to this notice," the DHS notice stated.

The additional tariffs on Indian goods were first announced by President Donald Trump as punishment for New Delhi’s continued purchase of Russian oil.

According to the Department of Homeland Security, the new duties will apply to goods entering the US for consumption or withdrawn from warehouses for consumption from 12:01 a.m. EDT on Wednesday, which is 9:31 a.m. IST.

White House trade adviser Peter Navarro and US Secretary of State Scott Bessent have blamed India for purchasing Russian oil and indirectly helping Moscow finance its war in Ukraine, stating that the practice must stop.

Bessent has also said that India is profiting from its sharply higher imports of Russian oil since Western sanctions were imposed on Moscow’s crude supplies. He said that Russian oil now accounts for 42 per cent of India’s overall imports, up from less than 1 per cent before the war, calling this increase ‘unacceptable’.

The Indian stock markets reacted sharply, with heavy selling across sectors in intraday trade on Tuesday. The Sensex fell nearly 800 points and the Nifty dropped below 24,750 amid growing concerns over the Trump tariffs.

Exporter associations estimate that the tariff hikes could affect almost 55 per cent of India’s 87 billion dollars worth of exports to the US, while competitors such as Vietnam, Bangladesh and China may benefit, according to a Reuters report.

"The US customers have already discontinued new orders. With these extra tariffs, the exports may decline by 20-30% from September onwards," said Pankaj Chadha, president, Engineering Exports Promotion Council.

India’s diamond industry, which has already been struggling with exports falling to a two-decade low due to weak Chinese demand, is now facing a further blow with the new tariffs.

Prime Minister Narendra Modi has said that he will not compromise the interests of Indian farmers even if the country has to pay a heavy price.