In a sweeping escalation, the U.S. officially announced an additional 25% tariff on top of an existing 25% duty, bringing total import charges on Indian goods to 50%, effective 12:01 a.m. EST on August 27, 2025. The move, rooted in allegations over India’s continued purchase of discounted Russian oil, reflects broader geopolitical friction.

India reacted strongly, denouncing the tariffs as “unfair, unjustified and unreasonable,” while expressing willingness to explore diplomatic channels to resolve the dispute. In the meantime, exporters rushed to clear U.S.-bound orders—especially in sectors like textiles, gems, and marine products before duties escalate, leading to a surge in shipments via air and sea.

Financial markets felt the pressure too: the Indian rupee slid for a fourth straight session to around ₹87.58 per U.S. dollar, as firms anticipated costlier exports and wider deficits. With economic and diplomatic tensions intertwined, India now grapples with preserving export competitiveness amid a fast-unfolding trade showdown.