India’s electronics and pharma exports remain exempt from additional tariffs for now, but the impact would be felt in India domestically “with labour-intensive exports like textiles and gems and jewelry taking the fall”, Priyanka Kishore of Asia Decoded, a Singapore-based consultancy told the BBC.
Rakesh Mehra of Confederation of Indian Textile Industry (Citi) called the tariffs a “huge setback” for India’s textile exporters, saying they will sharply weaken competitiveness in the US market.
With tensions now escalating, experts have called Trump’s decision a high-stakes gamble.
India is not the only buyer of Russian oil – there are China and Turkey as well – yet Washington has chosen to target a country widely regarded as a key partner.
So what changed and what could be the fallout?
India’s former central bank governor Urjit Patel said that India’s “worst fears”, external have materialised with the recent announcement.
“One hopes that this is short term, and that talks around a trade deal slated to make progress this month will go ahead. Otherwise, a needless trade war, whose contours are difficult to gauge at this early juncture, will likely ensue,” Mr Patel wrote in a LinkedIn post.
The damaging impact of the tariffs is why few expect them to last. With new rates starting 27 August, the next 20 days are critical – India’s moves in this bargaining window will be closely watched by anxious markets.
The key question is whether Prime Minister Narendra Modi’s government will quietly abandon trading ties with Russia to avoid the “Russia penalty” or stand firm against the US.
“India’s efforts to reduce its dependence on Russian military hardware and diversify its oil imports predate pressure from the Trump administration, so Delhi may be able to offer some conciliatory gestures in line with its existing foreign policy behaviour,” according to Dr Chietigj Bajpaee of Chatham House.
He says the relationship is in a “managed decline”, losing Cold War-era strategic importance, but Russia will remain a key partner for India for the foreseeable future.
However, some experts believe Trump’s recent actions give India an opportunity to rethink its strategic ties.