The suspension of new orders from India by major US retailers like Amazon, Walmart, Target, and Gap, following President Donald Trump’s imposition of a 50% tariff on Indian goods, will hit India hard economically. The US being the largest market for India, the tariff hike is expected to impact nearly 55% of these exports, where a potential 40-50% drop is expected in US-bound orders. This could lead to a loss of $4-5 billion in export revenue.
The exporters have received letters and emails from US buyers requesting that they suspend the apparel and textile shipments until further notice, as the buyers have clearly stated that they aren’t ready to share the cost burden. Major exporters like Welspun Living, Gokaldas Exports, Indo Count and Trident make about 40 per cent to 70 per cent of sales in the US.
Which All Will Be Hardly Hit?
Textiles and apparel are the major hit currently, as it account for 28% of India’s total exports to the US ($36.61 billion in FY25). US accounted for 28 per cent of total textiles and apparel exports which is valued at $36.61 billion, in the fiscal year that ended March 2025. India is the sixth largest exporter of textiles and apparel in the world. After the twin tariff hikes, it is now fearing to lose orders to Bangladesh and Vietnam, which face a 20 per cent tariff.
Other sectors affected are gems and jewellery, which bring in $10 billion a year, auto parts worth $7 billion, leather goods, and marine products. Many of these industries are run by Micro, Small, and Medium Enterprises (MSMEs).
Trump’s Tariffs On India
US President Donald Trump has enacted a 50% tariff on Indian goods, with 25% taking effect on Thursday and an additional 25% scheduled for August 28, as a punitive measure for India’s continued purchase of Russian oil.
“I determine that it is necessary and appropriate to impose an additional ad valorem duty on imports of articles of India, which is directly or indirectly importing Russian Federation oil,” he wrote in an executive order signed on Wednesday.
India has denounced the US tariffs as “unfair, unjustified, and unreasonable.”
“The United States has in recent days targeted India’s oil imports from Russia. We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India,” the Ministry of External Affairs said in a statement.
