Desi Talk

www.desitalk.com – that’s all you need to know 9 SPECIAL REPORT September 5, 2025 India Braces As 50 Percent U.S. Tariffs Come Into Effect -NEW DELHI , INDIA T he United States onWednesday im- posed a 50 percent tariff on Indian exports, upending the once-warm diplomatic and trade relationship between the two countries. The tariffs went into effect at 12:01 a.m. Eastern time. President Donald Trump had announced on Aug. 6 that he would double the 25 percent U.S. tariffs against India as punishment for “directly or indirectly importing Russian Federation oil.” The initial 25 percent tariff went into effect Aug. 7. “India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits,” Trump wrote on social media at the time. “They don’t care how many people in Ukraine are being killed by the RussianWar Ma- chine. Because of this, I will be substan- tially raising the Tariff paid by India to the USA.” India – the world’s fifth-largest econo- my and one of the United States’ larg- est trading partners – is now among the highest tariffed byWashington. The U.S. imported $87.3 billion worth of Indian goods in 2024, according to data from the U.S. Trade Representative. The Trump administration has become increasingly hostile toward New Delhi, also accusing India of hurting American workers. In response, India questioned Trump’s targeting of India over Russian oil purchases, saying China is Moscow’s largest buyer yet may be tariffed less than India. In mid-July, Trump threatened tariffs on Russia if it did not stop fighting in Ukraine within 50 days, later shorten- ing that deadline to early August. But on Aug. 6 – the day Trump announced the additional tariffs on India – Trump said he would meet with Russian President Vladi- mir Putin, and his announced deadline for Russia passed without a tariff change. In India, the tariff enactment is creating political headaches for Prime Minister Narendra Modi. He has said he will pro- tect India’s agriculture, seafood and dairy workers from being impacted by a trade deal with the U.S., sectors that together account for a majority of the country’s la- bor force. On Aug. 7, he said he was willing to “pay a heavy price” to do so. “You all are witnessing the politics of economic selfishness in the world, how everyone is busy protecting their own self interest,” Modi said during a rally in Gujarat on Monday, without referring to a country by name. But members of Modi’s political op- position have latched onto his inability to procure a deal with Trump as a failure of his foreign policy, which they say is heavier on joint appearances, hugs and scripted events than substantive diplo- matic engagement. The tariffs’ impact on India could be devastating. A 50 percent surcharge on In- dia would impact 66 percent of its exports to the U.S., and could slash those exports to $49.6 billion next year, according to a report by the Global Trade Research Initia- tive. India’s apparel, textile, gems, shrimp, carpets and furniture exports would be most affected, the report said, “endanger- ing hundreds of thousands of jobs.” The tariff war has also had geopoliti- cal consequences forWashington. Since Trump announced he would levy a 50 percent tariff on India earlier this month, Modi has courted a cozier relationship with members of the BRICS coalition, which includes China, Russia, Brazil and South Africa. Modi will also visit China at the end of this month, his first visit to the country in seven years. Two of India’s leading stock market indexes, the BSE Sensex and Nifty 50, were down around 1 percent in value as of Wednesday afternoon, losses that were re- corded after Tuesday’s closing. Both mar- kets were closedWednesday (August 27, 2025) to mark a Hindu religious festival. Diamonds are among the products that will be affected by the tariffs. The city of Surat, in India’s western state of Gujarat, is the country’s diamond capital – and nearly every diamond sold in the world is first cut and polished there. As The Washington Post reported earlier this week, tariffs have brought the town to a near-standstill. -TheWashington Post PHOTO:REUTERS/Francis Mascarenhas/File Photo A man reads a newspaper outside the Bombay Stock Exchange (BSE) after Trump’s tariff plan announcement, in Mumbai, India, April 4, 2025. By Pranshu Verma,Victoria Bisset Trump Tariffs Upend Lives And Stall Industry In India’s Diamond Capital -SURAT, INDIA A jay Lakum has been a diamond worker his entire adult life, like his father before him. His wages as a sorter were modest, but the work was steady, helping Lakum support his 10-person household and contribute to his mother’s cancer treatments. About two weeks ago, he was among a group of 20 workers told abruptly not to show up the next day. He has called dozens of companies looking for work, he said, but none are hiring. All he can think about are the bills com- ing due. “I am very stressed,” said Lakum, 35. “My mental health is ruined.” He is a direct casualty of the escalating trade war be- tween the United States and India. Nearly every diamond sold in the world is first cut and polished in the city of Surat, in western Gujarat state. The U.S. is the single-larg- est buyer of these precious stones, purchasing roughly $5 billion in the last fiscal year, according to India’s Gem & Jewelry Export Promotion Council. But President Donald Trump’s 25 percent tariffs on In- dia, which took effect on Aug. 7 and are set to climb to 50 percent onWednesday, have brought this diamond town to a near-standstill, according to interviews with work- ers, merchants and industry analysts. Export orders are on pause. Union leaders estimate 50,000 workers have been laid off since April, when Trump announced a 10 By Pranshu Verma, Supriya Kumar PHOTO:Supriya Kumar/TheWashington Post PHOTO:Supriya Kumar/TheWashington Post Ajay Lakum, 35, got laid off from his job as a diamond sorter about two weeks ago in Surat, Gujarat, shortly after President Donald Trump’s announcement of 50 percent tariffs on India. Kohinoor Road in Surat, Gujarat, the world’s diamond polishing capital. -Continued On Page 10