Delhi-US President Donald Trump’s steep 50% tariffs on Indian goods have officially taken effect, weeks after he imposed an additional 25% penalty over India’s purchases of Russian oil and weapons. The move makes India one of the most heavily targeted countries in the world by US tariffs, despite being a key partner in the Indo-Pacific.

The decision is expected to hurt exports and growth in India, the world’s fifth-largest economy, as the US was until recently its biggest trading partner. In response, Prime Minister Narendra Modi has promised major tax relief to cushion the economic shock. He announced that a “massive tax bonanza” will be delivered to ordinary citizens and small businesses, which he described as the backbone of Asia’s third-largest economy.

During his Independence Day speech at Delhi’s Red Fort, Modi urged citizens to adopt self-reliance by promoting “Swadeshi” or “Made in India” goods. “We should become self-reliant, not out of desperation but out of pride,” he said, stressing that India must not allow others to control its economy.

His message has been repeated in several public speeches, seen as a direct response to Trump’s tariffs that threaten millions of jobs across India’s export-driven sectors, from textiles to gems and seafood.

While Modi’s “Make in India” campaign has struggled, with manufacturing stuck at around 15% of GDP despite subsidies and incentives, experts believe tax reforms could soften the impact. After announcing a $12 billion income tax package earlier this year, Modi is now pushing for a major overhaul of India’s goods and services tax (GST) to simplify and reduce rates, aiming to put more money in people’s hands and encourage domestic spending.