As 50% US tariffs take effect, India braces for $48.2B export hit

Sectors to be impacted by US tariffs

Estimates by New Delhi-based think tank, Global Trade Research Initiative, suggest labor-intensive sectors such as textiles, gems and jewelry, leather goods, food and automobiles will be hit hardest.

“The new tariff regime is a strategic shock that threatens to wipe out India’s long-established presence in the US, causing unemployment in export-driven hubs and weakening its role in the industrial value chain,” said Ajay Srivastava, the think tank’s founder and a former Indian trade official.

The US has for now exempted some sectors such as pharmaceuticals and electronic goods from additional tariffs, bringing some relief for India as its exposure in these sectors is significant.

Exporters fear losses

Puran Dawar, a leather footwear exporter in northern India’s Agra city, says the industry would take a substantial hit in the near term unless domestic demand strengthens and other overseas markets buy more Indian goods. “This is an absolute shock,” said Dawar, whose business with the US has grown in recent years.

Dawar’s clients include the major fashion retailer Zara.

Dawar, who is also the regional chairman of the Council for Leather Exports — an export promotion body — said the US should understand that the steep tariffs will hurt its own consumers.

Groups representing exporters warn that new import tariffs could hurt India’s small and medium enterprises that are heavily reliant on the American market.

“It’s a tricky situation. Some product lines will simply become unviable overnight,” said Ajay Sahai, director general of the Federation of Indian Export Organisations.

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