India’s export sector is bracing for a severe blow as the United States begins enforcing hefty tariffs on Indian-origin goods, effective from Wednesday. The U.S. Department of Homeland Security has confirmed an additional 25 percent tariff, potentially raising total duties on Indian exports to as high as 50 percent among the steepest ever levied on any trading partner.

This move is being viewed in Washington as a punitive response to India’s increased importation of Russian oil.

The sweeping tariff measures are expected to disrupt about 55 percent of India’s annual $87 billion exports to the U.S. Key sectors facing the brunt include textiles, processed foods, leather, marine products, and jewelry.

Exporters are anticipating order declines of up to 30 percent beginning in September, prompting urgent calls for government intervention to cushion the impact.

The ripple effects are already evident across Indian markets. Benchmark indices such as the Nifty 50 and BSE Sensex have each dropped by approximately 0.7 percent, erasing gains made earlier in August.

Stocks in export-sensitive sectors including textiles, pharmaceuticals, chemicals, and seafood are bearing the heaviest losses, while consumer-oriented shares offer some relief, nudging slightly upward.

The looming tariff wave has also rattled India’s foreign exchange markets. The Indian rupee weakened further as concerns mounted over rising import costs and the widening trade deficit.

Analysts warn that the tariffs could shave off as much as 0.8 percentage points from India’s annual economic growth, and significantly pinch corporate earnings.

Highlighting the urgency, India’s Commerce Ministry is scrambling to respond, promising financial aid and incentives to exporters. The government is also pursuing diversification strategies, encouraging firms to seek new markets across China, Latin America and the Middle East.

Despite political criticism, Prime Minister Narendra Modi has reaffirmed that agricultural interests and small businesses will be protected, even as the government maintains its economically driven stance on oil imports.

The diamond industry, particularly in Surat which processes over 80 percent of the world’s rough diamonds is already feeling the strain. With U.S. tariffs set to double, officials warn the crisis could jeopardize up to 200,000 jobs in the sector. Some exporters have begun to shift operations to Botswana to leverage its lower tariff regime.

India’s diplomatic response has been fierce. Officials denounce the tariffs as “unfair and unreasonable,” pointing out that Western nations, particularly the U.S. and EU, continue to engage with Russia without facing similar punitive measures.

Despite the pressure, New Delhi refuses to back down on its energy policy, emphasizing that economic considerations not political agendas guide its imports.

In summary, the new U.S. tariffs represent a historic escalation in trade tensions, threatening major setbacks for Indian exporters, particularly in sensitive sectors.

With mounting economic and political fallout, the government’s ability to safeguard industries and jobs will be crucial in navigating what many are calling India’s most formidable trade challenge in years.