US Begins Imposing Retaliatory 50% Tariffs on India... "Threatens India's Export Competitiveness"

Tariffs Imposed Due to Reasons Including Russian Crude Oil Imports… 25% Counter-Tariff Plus 25% Retaliatory Tariff

Experts: "India's Position in US Market Weakened"... Potential to Mitigate Economic Shock with Domestic Demand as Basis

US President Trump (left in photo) and Indian Prime Minister Modi [AFP Yonhap News. Redistribution and DB prohibited]

The US administration under Donald Trump began imposing retaliatory tariffs of 50% on Indian products on the 27th (local time), citing reasons such as imports of Russian crude oil.

According to foreign media, the Trump administration began imposing 50% tariffs on Indian products starting at 0:01 AM Eastern Standard Time (1:01 PM Korean time on the 27th, 9:31 AM Indian Standard Time on the 27th).

The Trump administration had previously announced this draft plan on the 25th.

The US Department of Homeland Security stated in its announcement, "A 50% tariff will be imposed on Indian products imported for consumption or released from bonded warehouses after 0:01 AM on the 27th."

However, the 50% tariff will not apply to humanitarian aid items and items covered under mutual trade programs.

The US imposed a 26% country-specific tariff (counter-tariff) on India in April, and the two countries subsequently held five rounds of negotiations.

However, the two countries failed to reach an agreement due to disagreements over India's reduction of tariffs on US agricultural products and its cessation of purchasing Russian crude oil.

President Trump strongly criticized the oil trade between India and Russia and announced that he would impose a total of 50% tariffs on Indian products, which is the existing 25% counter-tariff plus an additional 25% in retaliation, a 1% decrease from the previous rate.

Recently, Peter Navarro, White House trade and manufacturing advisor, and Scott Bessant, US Treasury Secretary, who are referred to as President Trump's "tariff architects," also criticized India for indirectly supporting the war in Ukraine by increasing its purchases of Russian crude oil.

However, India maintains that its stance that pressure not to purchase Russian crude oil is unjustified, as it is cost-competitive.

Bloomberg pointed out that the 50% tariff is the highest rate imposed by the US on its Asian trading partners, and that India, a rapidly growing major economy, could face a period of stagnation in trade with the US, its largest export market.

It also added that India's export competitiveness could be threatened compared to competitors like Vietnam.

However, there are also opinions that India's economy, which relies heavily on domestic demand rather than exports, could mitigate the economic shock from the 50% tariffs.

Last year, India's exports to the US amounted to $87.4 billion (approximately 121.9 trillion won), making the US India's largest export market. However, this accounts for only 2% of India's total Gross Domestic Product (GDP).

In a recent report, Trinh Nguyen, senior economist at Natixis, a French global financial company, stated, "External pressure may accelerate India's delayed reforms."

Port in Gujarat, western India [Reuters Yonhap News. Redistribution and DB prohibited]