The President announced in March the preferential treatment would be revoked but at the time did not reveal a date when it would happen.
India has benefitted from a scheme that has seen up to $5.6billion worth of goods enter the US duty-free, but this will end next week on June 5.
The preferential trade treatment comes under the Generalized System of Preferences (GSP) programme which aids growth in developing countries and has been key in the growth of India.
The move comes after Turkey’s preferential status under the scheme was also ended last month as the administration aims to curb unfair trading relationships with other nations.
In a proclamation, Mr Trump said: “I have determined that India has not assured the US that it will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India’s beneficiary developing country effective June 5, 2019.”
The change means that India will pay increasing tariffs on products such as solar panels and washers, suspending the exemption it had granted as India was a developing country.
President Trump said: “I have determined to remove it from the list of developing country WTO members exempt from application of the safeguard measures on CSPV products and large residential washers.”
The new changes come just a day after President Narendra Modi was sworn in for his second term after his party won by a landslide in the recent election campaign.
In a statement, the Indian government said: “India as part of our bilateral trade discussions, had offered resolution on significant US requests in an effort to find a mutually acceptable way forward. It is unfortunate that this did not find acceptance by the US.”
The statement said that the government was “confident” that the two nations could continue to work together and grow ties in a “mutually beneficial matter”
“India, like the US and other nations shall always uphold its national interest in these matters,” said the statement, “We have significant development imperatives and concerns and our people also aspire for better standards of living. This will remain the guiding factor in the Government’s approach.”
The two nations have been in a battle for months over trade agreements. American negotiators were concerned by India’s stance on technology, while India was upset by the US’ move to stop India buying oil from Iran.