India's 2025 export tax situation is primarily defined by theUS 50% tariff on most Indian goods, which was implemented in August 2025 and significantly impacts Indian exports to the US. In response, India has also introduced its own domestic Goods and Services Tax (GST) reforms (effective September 2025), which includes reducing GST rates on various goods like packaging and textiles to lower production costs and enhance competitiveness, alongside implementing provisional GST refunds to support exporters.
US tariffs on Indian goods
Rate: A 50% tariff has been imposed by the US on most goods from India, according to ClearTax, BBC, and Al Jazeera.
Reason: These tariffs are a result of India's purchase of Russian oil and weapons.
Impact: The tariffs are expected to make Indian goods more expensive in the US, potentially slowing down exports and economic growth, with sectors like gems, jewelry, garments, footwear, and industrial chemicals being heavily affected, notes Al Jazeera and this LinkedIn post.
Indian domestic GST and export-support measures
GST 2.0 Reforms:
The GST system was simplified in September 2025 by reducing the slabs from four (5%, 12%, 18%, 28%) to three (5%, 18%, 40%), as described by MODIFI.
Reduced GST rates:
To lower production costs and boost competitiveness, GST on products like paper packaging, textiles, leather, and wood has been reduced from 12-18% to 5%, and on toys and sports goods from 12% to 5%, according to PIB and this PIB document.
A 90% provisional refund for zero-rated supplies and inverted duty structure claims will be available based on risk checks from November 1, 2025, as mentioned in PIB.
Other support:
The government is working to expand export markets and reduce dependence on specific geographies to mitigate the impact of the US tariffs, reports Bloomberg.
