Trump tariffs extremely shocking; to impact 55% of India's exports: FIEO

New Delhi: The US decision to impose an additional 25 per cent tariff on Indian goods is "extremely shocking" and will impact 55 per cent of India's exports to America, FIEO said on Wednesday.

US President Donald Trump on Wednesday slapped an additional 25 per cent tariff on goods coming from India as a penalty for New Delhi's continued purchase of Russian oil, a move that is likely to hit sectors such as textiles, marine and leather exports hard.

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After this order, the total tariff on Indian goods, barring a small exemption list, will be 50 per cent.

"This move is a severe setback for Indian exports, with nearly 55 per cent of our shipments to the US market directly affected. The 50 per cent reciprocal tariff effectively imposes a cost burden, placing our exporters at a 30–35 per cent competitive disadvantage compared to peers from countries with lesser reciprocal tariff," Federation of Indian Export Organisations (FIEO) DG Ajay Sahai said.

He added that many export orders have already been put on hold as buyers reassess sourcing decisions in light of higher landed costs.

"For a large number of MSME-led sectors, absorbing this sudden cost escalation is simply not viable. Margins are already thin, and this additional blow could force exporters to lose long-standing clients," Sahai said.

With this high tariff, the domestic exporters will have to look for alternative markets, he said.

After the new levy, India will attract the highest tariff of 50 per cent along with Brazil. After this, India's competitors will be much better placed in the US market as their duty is lower - Myanmar (40 per cent), Thailand and Cambodia (both 36 per cent), Bangladesh (35 per cent), Indonesia (32 per cent), China and Sri Lanka (both 30 per cent), Malaysia (25 per cent), Philippines and Vietnam (both 20 per cent).

In 2024-25, the bilateral trade between India and the US stood at USD 131.8 billion (USD 86.5 billion exports and USD 45.3 billion imports).