Zee Business Exclusive: US tariff shock on Indian imports takes effect soon; PMO meets to limit fallout

Zee Business Exclusive: The US Customs and Border Protection (CBP) has issued a draft notification to impose an additional 25 per cent tariff on Indian imports, effective August 27 at 12:01 am EDT - which is 9:31 am IST. The move comes in the wake of US President Donald Trump's Executive Order 14329, targeting countries with close ties to Russia.

Soon after the notification was issued, the government started chalking out a multi-pronged strategy to mitigate the losses from the tariff hike, which is expected to see crucial discussions in the Prime Minister's Office (PMO) today, sources told Zee Business.

The PMO is expected to hold a high-level meeting today to review the situation, said the sources.

The meeting will involve consultations with key stakeholders from affected sectors such as pharmaceuticals, medical equipment, textiles, and engineering goods. The government's primary objective is to minimise the immediate economic impact, while accelerating efforts towards long-term resilience, they added.

Key highlights of the government’s response plan, according to sources:

• Emergency Meeting in PMO to assess sector-wise impact
• High-level inter-ministerial consultations expected today
• Two Empowered Groups of Ministers (eGoMs), chaired by Amit Shah and Rajnath Singh, have been formed to lead long-term economic and social reforms
• Meetings of these eGoMs could be held later this week
• A new export promotion scheme is in the final stages of preparation, aimed at boosting India's competitiveness over a six-year horizon

President Trump’s tariff triggered by geopolitical tensions

The CBP clarified that the new duties will come into effect on August 27, 2025. From 12:01 am Eastern Daylight Time on that day, the higher tariffs will apply to all products of India that are either entered for consumption in the United States or withdrawn from warehouses for consumption.

The move follows Trump's earlier statement on July 30, where he cited India's "high tariffs" and "non-monetary trade barriers", as well as its continued energy and defense ties with Russia, as reasons for the punitive measures.

It should be noted that Zee Business was the first to report about the government's plan to launch a Long Term Export Promotion Scheme on August 9.

Sources say that it is likely to be announced soon.