Experts warned that any action by the US to raise import taxes or tariffs on Indian products might have a negative effect on the nation’s exports to Washington.
US Tariff Threat Raises Export Concerns
But, they said, it may also force exporters to de-risk their international markets and diversify more quickly.
Speaking to reporters on Sunday, US President Donald Trump said that Washington could increase tariffs on New Delhi “pretty rapidly” and that Prime Minister Narendra Modi was aware of his dissatisfaction with India’s imports of Russian oil.
Warning Signals From Washington
According to the experts, India has to make a “clear judgment” on Russian oil as the tariff threat intensifies. “Indian shipments to the US have already decreased 20.7% between May and November 2025, and additional tariff escalation might induce a sharper reduction,” said the economic think tank GTRI on Monday. According to the report, Indian products are already subject to a high 50% tax, of which 25% are directly related to imports of Russian petroleum.
Impact of Russian Oil Imports on Trade
India lacks strategic clout over the US, in contrast to China. China is the largest consumer of Russian crude, but the US has disregarded this out of concern about potential repercussions. Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), said, “India has increased imports of petroleum crude and products from the US, but the US will disregard this.”
India’s Limited Leverage Compared to China
Beyond the current 50% duty, a further increase by the US “would adversely hurt Indian exports, especially in traditional areas of exports,” according to the Apex Exporters’ Organization (FIEO).
Export Risks Under Higher Tariffs
📦 US Tariff Pressure on Indian Exports
- Current Tariff Level: Up to 50% on Indian goods
- Key Trigger: Imports of Russian oil
- Export Decline: 20.7% fall between May–November 2025
- Major Market: United States (18% of India’s exports)
- Risk: Further tariff escalation may deepen losses
However, they may also serve as a spur for quicker de-risking and diversification. According to Ajay Sahai, director general of the Federation of Indian Export Organizations (FIEO), “such pressures push exporters to avoid over-dependence on a single market, seek new destinations, and modernize goods and processes, even if some price-sensitive commerce may diminish.”
Diversification as a Strategic Response
“Similar adjustments are likely across other sectors, ultimately leading to a more balanced, resilient, and globally diversified export portfolio,” Sahai continued, adding that while the shift may be difficult for some industries, it is evident that the Indian industry can adapt swiftly in industries like marine products, where exporters have quickly diversified markets.
Long-Term Export Resilience
Despite the high tariffs on domestic products, India’s merchandise exports to the US increased 22.61% to USD 6.98 billion in November, after two months of negative growth.
The nation’s exports to the US surged by 11.38 percent to USD 59.04 billion between April and November of current fiscal year, while imports jumped by 13.49 percent to USD 35.4 billion.
Recent Trade Performance With the US
⚠️ India–US Trade Deal at a Crossroads
- Negotiation Rounds: Six completed so far
- Core Issue: 50% tariffs on Indian products
- US Demands: Tariff cuts on industrial and farm goods
- India’s Stand: No compromise on MSMEs and farmers
- Trade Target: USD 500 billion by 2030
The two nations were negotiating a bilateral trade pact when the US president made the threat. There have been six rounds of discussions for it so far. A framework agreement to address the 50% tariffs on Indian products entering the United States is part of the agreement.
Status of the Bilateral Trade Pact
Commerce Secretary Rajesh Agrawal said on December 23 of last year that India is actively involved in trade talks with the United States and intends to wrap up the negotiations “sooner than later” in a way that gives local exporters more market access.
Recently, Rick Switzer, the US Deputy Trade Representative, and his colleagues visited to assess these discussions. On December 11, 2025, the most recent round of two-day negotiations came to an end.
Diplomatic Engagement and Progress
Due to the negative impact of high import charges on their shipments to the United States, the Indian industry and exporters are anxiously expecting the end of talks and the announcement of a settlement.
The US continues to be a major destination for them, making up about 18% of their exports, even if they are looking into new markets to sustain their export earnings.
Exporters Await Clarity
The United States is requesting tariff reductions on industrial items and agricultural products including apples, maize, and almonds as part of the agreement. In the dairy and agricultural industries, India has vehemently fought any concessions. India has said that it would not jeopardize MSMEs’ and farmers’ interests.
Sensitive Sectors and Sticking Points
The presidents of the two nations instructed staff to conclude a deal in February 2025. The first phase of the agreement was supposed to be completed by autumn 2025. By 2030, the pact seeks to more than increase bilateral commerce from the current USD 191 billion to USD 500 billion.
Long-Term Trade Ambitions
With bilateral trade at USD 131.84 billion in 2024–2025, including USD 86.5 billion in exports, the US continued to be India’s top trading partner for the fourth year in a row.
Conclusion
The renewed tariff threat from the United States presents both risks and opportunities for India’s export sector. While higher duties could strain traditional export segments and deepen short-term challenges, they may also accelerate diversification, market expansion, and long-term resilience among Indian exporters as trade negotiations continue.
Disclaimer
This article is for informational purposes only and is based on publicly available statements and reports. It does not constitute trade, legal, or policy advice. Readers are advised to consult official government sources or professional advisors before making decisions based on the information provided.
