From jewellery to shrimp, which sectors will be hit hardest by Trump’s tariffs on India?

How will 50% US tariff impact Indian exports?

According to industry experts, sectors such as leather, chemicals, footwear, gems and jewellery, textiles and shrimp will be hit hard by the decision. The tariffs are expected to make Indian goods far costlier in the US, having the potential to bring the US-bound exports down by 40 to 50 per cent,  think tank Global Trade Research Initiative (GTRI) said.

The organic chemicals’ exports to the US will attract additional 54 per cent duty. The carpets will  get 52.9 per cent costlier while knitted apparel will cost 63.9 per cent and woven apparel 60.3 per cent higher. Textiles, and made ups will also see a 59 per cent hike in tariffs. With the US being India’s largest market for textile and apparel exports, the Confederation of Indian Textile Industry (CITI) said it is “deeply concerned” about the severe impact the 50 per cent US tariff rate for India is about to bring. “The US tariff announcement of August 6 is a huge setback for India’s textile and apparel exporters as it has further complicated the challenging situation we were already grappling with and will significantly weaken our ability to compete effectively vis-à-vis many other countries for a larger share of the US market,” news agency PTI quoted the federation as saying. It also urged the government to take immediate steps to aid the sector during these hugely testing times.

Other goods that will be severely hit by the higher tariff rates are diamonds and gold products (52.1 per cent), machinery and mechanical appliances (51.3 per cent), and furniture, bedding and mattresses (52.3 per cent). Kama Jewelry MD Colin Shah said this move is a complete setback for Indian exports as almost 55 per cent of India’s shipments to the US market will be directly hit by the decision. The cost burden resulting from the new tariff rate will place Indian exporters at a 30–35 per cent competitive disadvantage compared to their peers from countries with lesser reciprocal tariff, he said. “Many export orders have already been put on hold as buyers reassess sourcing decisions in light of higher landed costs. For a large number of MSME-led sectors, absorbing this sudden cost escalation is simply not viable. Margins are already thin, and this additional blow could force exporters to lose long-standing clients,” PTI quoted Shah as saying.

According to a Kolkata-based seafood exporter and MD of Megaa Moda Yogesh Gupta India’s shrimp will now become expensive in the US market. “We are already facing huge competition from Ecuador as it has only 15 per cent tariff. Indian shrimp already attracts a 2.49 per cent anti-dumping duty and a 5.77 per cent countervailing duty. After this 25 per cent, the duty will be 33.26 per cent from August 7,” PTI quoted Gupta as saying.

In 2024-25, the bilateral trade between India and the US stood at USD 131.8 billion (USD 86.5 billion exports and USD 45.3 billion imports). After imposition of 50 per cent tariff, the sectors such as textiles/clothing (10.3 billion), gems and jewellery (12 billion), shrimp (USD 2.24 billion), leather and footwear (USD 1.18 billion), chemicals (2.34 billion), and electrical and mechanical machinery (about USD 9 billion), will bear the brunt.

The United States has imposed the additional duties only on India as penalty for Russian imports while other buyers such as China and Turkey, have so far dodged such measures.

Exporters hope that early finalisation of the India-US bilateral trade agreement will help in dealing with the tariff challenges. The negotiations between India and the US are still underway for an interim trade deal, aiming to conclude the first phase of the pact by fall (October-November) this year.

— With inputs from PTI