Trump’s Tariffs Put Indian Exporters Under Severe Pressure
Indian manufacturers are reeling after US President Donald Trump announced steep import tariffs on goods from India, totalling more than 50%. The sudden escalation has triggered alarm among exporters, investors, and trade analysts, with fears that the duties could derail Prime Minister Narendra Modi’s “Make in India” push and jeopardise billions in trade.
The new tariffs—an additional 25% effective August 27 on top of an earlier 25% imposed this month—have sparked frantic calls from US clients to Indian suppliers, many of whom are now considering shifting production to alternative markets such as Vietnam, Bangladesh, and Sri Lanka.
Apparel, Jewellery, and Shrimp Among Hardest-Hit Sectors
The impact is expected to be felt most acutely in labour-intensive sectors like apparel, jewellery, carpets, and shrimp exports. Industry experts warn that US sales in these categories could plummet by 50–70%.
For companies such as Gokaldas Exports, which earns half its revenue from the US supplying major retailers like Walmart, Gap, and Abercrombie & Fitch, the announcement was devastating. “At 50% tariff there is no business to be done,” said Managing Director Sivaramakrishnan Ganapathi, adding that brands were already scaling down sourcing from India.
Similarly, Sudhir Sekhri, chair of India’s Apparel Export Promotion Council, warned the duties could result in $5 billion in lost sales over the next seven months—half of the sector’s exports to the US in the previous fiscal year.
US Cites Russia Ties as Tariff Justification
Trump has repeatedly criticised India as a “tariff king” and linked the latest hike to New Delhi’s continued purchases of Russian oil and defence equipment. The move puts India’s largest export market—worth $87 billion in the year to March—at significant risk.
Although big-ticket exports such as pharmaceuticals and smartphones are temporarily exempt, analysts caution these categories could face separate levies in the future. Moody’s has warned that maintaining the 50% tariff beyond 2025 could severely damage India’s manufacturing competitiveness compared to regional rivals.
Investors and Clients Seek Alternative Supply Chains
Manufacturers are now under intense pressure to reconsider their supply chain strategies. Jash Engineering, an Indore-based water systems equipment maker, said tariff uncertainty is its biggest challenge, affecting over a third of its US-bound revenue. “This puts a lot of pressure on the orders we have already taken from America,” said company chair Pratik Patel.
Similarly, Bharat Forge, a major automotive components and armaments producer, has been holding urgent talks with clients to mitigate the fallout. “Tariff-related uncertainty is definitely something that nobody has experienced before,” said Vice-Chair Amit Kalyani.
Economic Experts Warn of ‘Trade Embargo’ Effect
Economists at Nomura have compared the scale of the tariffs to a trade embargo, warning that smaller businesses in thin-margin industries could be wiped out. Wendy Cutler, vice-president of the Asia Society Policy Institute, said the duties could “essentially cut off most Indian exports to the US.”
Trade analyst Ajay Srivastava of the Global Trade Research Initiative stressed that without a quick diplomatic resolution, India could lose its position as a credible alternative to China in global supply chains.
Urgent Need for Diplomatic Intervention
New Delhi now faces the challenge of negotiating with Washington to protect its export-driven sectors. Without a breakthrough, India’s efforts to attract foreign direct investment and strengthen its role in global manufacturing networks could suffer a long-term setback.
The tariff hike not only threatens immediate trade volumes but also risks eroding investor confidence. If India fails to adapt quickly, manufacturers warn that other Asian economies with lower tariff exposure will seize the opportunity to capture US market share.
