Leather To Jewellery: Indian Businesses To Reel Under Heavy US Tariffs; Exporters Brace for Major Losses

Indian exporters are expected to face a sharp escalation in costs and uncertainty following the United States' imposition of a 50% tariff on a wide range of Indian goods. The move, linked to India's continued imports of Russian oil, is expected to severely affect several major export sectors, prompting concerns across industry groups and export councils.

According to trade experts, the steep increase in duties will directly impact Indian businesses' ability to compete in the US - India's largest export market. Early estimates by the Global Trade Research Initiative (GTRI) suggest a 40-50% drop in exports to the US in the coming months.

Widespread Disruption Across Industries

The sectors most affected include textiles, apparel, gems and jewellery, chemicals, machinery, leather, and seafood. Several companies are already seeing US clients pause or cancel orders due to rising costs.

Breakdown of effective tariff increases:

• Knitted apparel: 63.9%
• Woven garments: 60.3%
• Textiles and home furnishings: 59%
• Organic chemicals: 54%
• Jewellery and diamonds: 52.1%
• Machinery: 51.3%
• Carpets and rugs: 52.9%
• Furniture: 52.3%

Colin Shah, MD of Kama Jewelry, revealed that over 55% of India's total shipments to the US are impacted, and many export orders are now on hold. "Buyers are reassessing their sourcing strategies," he noted.

Seafood Exporters Hit Hard

Shrimp exporters are among the worst affected. Yogesh Gupta, MD of Megaa Moda, explained that Indian shrimp will now carry a total duty burden of 33.26%, making it significantly more expensive than Ecuadorian shrimp, which faces only a 15% levy. The sector fears major loss of market share in the US.

Textile Sector Faces Severe Setback

The Confederation of Indian Textile Industry (CITI) expressed deep concern over the new tariffs, calling it a major setback for a sector already under stress from global demand volatility and rising input costs. The US alone accounts for a significant portion of India's textile and garment exports.

Exporters Eye Alternative Markets

With US-bound shipments facing higher duties, Indian exporters are now being urged to diversify into other geographies. Yadvendra Singh Sachan of Growmore International Ltd emphasized the need to "build stronger trade linkages with Europe, the Middle East, Africa, and Southeast Asia" to cushion the blow.

Trade Talks Offer a Glimmer of Hope

India and the US are currently negotiating a limited trade agreement, with a tentative target of concluding the first phase by October-November 2025. However, Indian officials have made it clear that no concessions will be made on critical sectors such as agriculture, dairy, and genetically modified products.

India-US Trade: What's at Risk

In FY 2024-25, India exported goods worth USD 86.5 billion to the US, while imports stood at USD 45.3 billion - making the US India's largest trading partner. With more than half of exports now under higher tariff scrutiny, businesses across India are bracing for a difficult year.

The first round of additional tariffs takes effect on August 7 at 9:30 am IST, followed by a second hike scheduled for August 27.