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Businesses and policymakers are casting around for help from unlikely places, as the country’s exports to the United States are crushed by 50 percent tariffs.
Aug. 27, 2025Updated 1:48 p.m. ET
When the full weight of the 50 percent U.S. tariff on Indian goods went into effect on Wednesday, it was 9:30 in the morning on a Hindu holiday in India. Overnight prayers for a miracle had gone unanswered.
Minutes later, Chandrima Chatterjee, the secretary general of the Confederation of Indian Textile Industry, had to ask twice whether it had actually happened. “Yesterday we were already in a state of shock,” she said. But “when there’s bad news you keep expecting something good to happen,” Ms. Chatterjee explained.
India has had less than a month to adjust to the fact that President Trump deemed it “not a good trading partner” and deserving of punishment. After months of hopeful negotiations over the details about soybeans and trade surpluses, on July 30 India found out that it was getting stuck with a 25 percent rate. A week later, the other shoe dropped: An additional 25 percent penalty would be applied because India buys Russian crude oil.
Those tariffs took full effect on Wednesday. Though China won a three-month reprieve in its tariff negotiations, a truce that lasts until November, against India Mr. Trump did not chicken out.
On Ganesh Chaturthi, a celebration of the elephant-headed god of overcoming obstacles, the stock market in the financial capital of Mumbai was closed. But Indian market indexes lurched in anticipation on Tuesday, losing a percentage point of value in their worst performance of the summer.
The pain of steep U.S. tariffs will not be evenly distributed. Huge parts of India’s economy are disconnected from world trade, and the country’s stock market is buoyed by the savings of Indians who have nowhere better to put their money. Some products, like pharmaceuticals and smartphones, are exempt from tariffs, for now. But the parts of the economy that are affected by the U.S. levies include businesses that provide mass employment.
