Overview

• A 25% reciprocal levy took effect on Aug. 7 and a linked 25% penalty tied to purchases of Russian oil is scheduled for Aug. 27, lifting duties on many Indian goods to 50%.
• The Commerce Ministry told Parliament that about $48.2 billion of 2024‑value merchandise exports face these tariffs, with textiles, apparel, leather, gems, footwear, ceramics and marine products most exposed, while services are largely outside the scope for now.
• The government scrapped the 11% import duty on cotton from Aug. 19 to Sept. 30 and is considering sector‑specific credit lines, cluster working‑capital funds and lower insurance premiums for MSME exporters as industry groups seek easier finance and temporary moratoriums.
• The sixth in‑person round of bilateral trade talks set for Aug. 25–29 has been called off, with officials indicating no active backchannel and a new date to be determined later.
• Moody’s warns the 50% rate would reduce demand for Indian goods very substantially and weigh on growth, while Fitch sees low direct exposure for many corporates but rising second‑order risks for auto suppliers, pharmaceuticals, crop chemicals and oil marketing companies.