New Delhi, Aug 27: The United States has imposed steep 50% tariffs on Indian goods, severely affecting key export sectors such as shrimp, apparel, leather, gems, and jewellery.
Exporters have raised alarms, warning that the new duties—comprising a 25% penalty added to an existing 25% tariff—could lead to massive job losses and shutdowns in India’s labour-intensive industries.
The U.S. is India’s largest export market, accounting for about 20% of its total goods exports, which stood at USD 437.42 billion in 2024–25. Bilateral trade in goods for the same year was valued at USD 131.8 billion, with USD 86.5 billion in exports from India. With over two-thirds of these now subject to high tariffs, India’s competitiveness in the U.S. market has taken a major hit.
The Apparel Export Promotion Council (AEPC) noted that the textile sector, with exports worth USD 10.3 billion, is among the worst affected. AEPC Secretary General Mithileshwar Thakur explained that while the industry had adapted to the initial 25% tariff, the additional 25% makes Indian garments uncompetitive compared to countries like Bangladesh, Vietnam, and Sri Lanka, which enjoy tariff advantages.
Gems and Jewellery Export Promotion Council (GJEPC) Chairman Kirit Bhansali said that with 50% of India’s cut and polished diamonds heading to the U.S., the hike could paralyse the entire industry. Competing nations like Turkiye and Vietnam continue to enjoy lower tariffs, further disadvantaging Indian exporters. The diamond-cutting industry, employing lakhs in Gujarat, is bracing for layoffs.
Shrimp exporters warn that Indian seafood will become unaffordable in the U.S. market, especially as they already face anti-dumping and countervailing duties. Ecuador, a key competitor, faces only a 15% tariff. Meanwhile, leather and footwear exporters report U.S. buyers demanding steep discounts or cancelling orders, forcing companies to consider 50% staff reductions.
The Global Trade Research Initiative (GTRI) termed the move a major trade shock. Founder Ajay Srivastava estimated that India’s exports to the U.S. could fall to USD 49.6 billion in FY2026. Around 66% of current exports to the U.S. will now face duties ranging from 25% to 50%.
Exporters are urging the Indian government to respond swiftly. Federation of Indian Export Organisations (FIEO) President S C Ralhan has proposed a moratorium on loan repayments for one year, collateral-free emergency credit, and automatic credit limit enhancements to ease business strain. He also recommended expanding the Production Linked Incentive (PLI) schemes, investing in infrastructure, and accelerating trade agreements with the EU, GCC, Latin America, and Africa. Early-harvest provisions for labour-intensive sectors should be prioritized.
FIEO is calling for coordinated efforts among exporters, industry bodies, and government to protect livelihoods and maintain India’s global trade presence amid this escalating tariff challenge. (PTI)
