Indian exporters warned that the additional US tariffs risk making business "unviable" after President Donald Trump ordered higher duties on Indian goods over New Delhi's purchases of Russian oil.

Shares opened slightly lower today, with the Nifty index falling 0.31% after the initial 25% US tariffs came into effect.

But they will be doubled in three weeks after Trump signed an order imposing an additional 25% tax on continued purchases of Russian oil from New Delhi, which is a key source of revenue for Moscow's war in Ukraine.

India is the second-largest buyer of Russian oil.

The Indian Foreign Ministry condemned Trump's announcement of new tariffs, calling the measure "unfair, unjustified and unreasonable," AFP reported.

S.S. Ralhan, president of the Federation of Indian Export Organizations (FIEO), said he feared alarming consequences.

"This measure is a serious blow to Indian exports, with nearly 55% of our shipments to the US market directly affected," he said.

"The 50% reciprocal tariffs effectively impose a financial burden that puts our exporters at a 30-35% disadvantage compared to their competitors from countries with lower reciprocal tariffs," Ralhan added.

According to him, "many export orders have already been postponed" as buyers reevaluate their delivery decisions.

For "a large number" of small and medium-sized enterprises, "profit margins are already low," he said.

"Absorbing this sudden increase in costs is simply not feasible," Ralhan added.

The world's fifth-largest economy — and most populous country — is bracing for tough times as the US is its biggest trading partner. In 2024, New Delhi exported goods worth $87.4 billion.

"If the additional 25% tariff that President Trump announced on imports from India remains in place, India's appeal as an emerging manufacturing hub will be seriously undermined," warned Shilan Shah of Capital Economics.

US spending accounts for about 2.5% of India's GDP, Shah said.

But the 50% tariff is "large enough to have a significant impact," he added, with the economy growing by around 6% this year and next as a result of the decline in exports, which is less than the 7% currently forecast. | BGNES