US Tariffs on Indian Goods Disrupt Textiles, Gems & More

US Tariffs: In an unexpected and ‘unfriendly’ policy pivot, US President Donald Trump on Wednesday announced a sweeping 25% tariff on Indian exports, along with an additional penalty for India’s oil trade with Russia. Effective from August 1, this hardline move under the banner of “fair trade” has sent tremors across India’s economic landscape, particularly among employment-heavy sectors like textiles, gems and jewellery, seafood, leather, and electronics.

Announcing the tariff hike via Truth Social, Trump remarked, “While India is our friend, they have some of the highest tariffs and most obnoxious non-monetary barriers in the world. We’ve done little business with them because of this. Plus, they keep buying military equipment from Russia.”

This blanket increase in US tariffs on Indian exports has sparked deep concern across India’s trade community, with many calling it a blow to decades of progress in Indo-US economic relations.

US Tariffs: Textiles – MSME-Led Sector Left Vulnerable

The textiles industry, heavily dominated by Micro, Small and Medium Enterprises (MSMEs), is already reeling. After gaining temporary relief through the India-UK FTA, this renewed tariff escalation threatens to derail its fragile recovery.

“The US has always been a critical market for us. These sudden tariffs are especially harsh for MSMEs that operate on wafer-thin margins,” said Suketu Shah, CEO of Vishal Fabrics. He noted a strategic pivot towards Latin American markets but acknowledged the uphill battle in entering and sustaining new territories.

Meanwhile, Vikas Singh, Director of HEWA, painted a grim picture: “Buyers are freezing new orders, demanding steep discounts of 10–15% on ready consignments. The tariff gap between India and China is now negligible—India’s 25% versus China’s 30%—eliminating our earlier competitive edge.”

Gems and Jewellery: Sparkle Dimmed in Global Market

The $33 billion Indian gems and jewellery export sector, with the US alone accounting for $9 billion, is poised to take a heavy hit. Jayanti Savaliya of GJEPC underlined the gravity: “We are the largest supplier to the US. Consumers there will feel the price rise. For us, this translates to an immediate fall in demand.”

The sector had only just started absorbing a 10% tariff from previous measures; now, a sudden jump to 25% makes price competitiveness unviable. The GJEPC is now pushing exporters to aggressively tap into emerging markets in Africa and Central Asia.

US Tariffs: Leather – Competitiveness Eroded

With the US accounting for over 21% of India’s leather exports, industry veterans fear long-term erosion of India’s competitiveness. “Tariffs like these are not sustainable. The US cannot cost-effectively manufacture these products domestically,” said Puran Dawar, Regional Chairman of CLE.

He believes diplomacy will eventually ease tensions but admits that companies must brace for leaner quarters ahead.

Electronics: High-Value Sector at Risk

India’s electronics exports to the US are valued at over $12 billion. For companies like Calcom Vision Ltd, the tariffs add significant cost burden.

“With global supply chains already fragile, these tariffs bring more uncertainty. Exporters will need to innovate at speed—via R&D, integrated production models, and deeper quality assurance,” said Abhishek Malik, Executive Director.

He estimates that costs could rise by more than 25%, forcing businesses to rethink pricing and investment strategies.

Renewable Energy: Indirect Shockwaves

While renewable energy components aren’t directly targeted, the ripple effects—rising input costs, currency shifts, and reduced investor confidence—are palpable.

“The margins in solar projects are razor-thin. Indirect impacts from this tariff shock may delay or downscale future projects,” said Neerav Nanavaty, CEO of BluPine Energy.

According to Prashant Mathur, CEO of Saatvik Green Energy, the episode highlights the urgent need for India to “build strategic resilience and deepen local manufacturing of solar modules and PV components.”

Seafood: Coastal Livelihoods at Risk

Frozen shrimp exports to the US were worth $4.8 billion last year. That figure is now at risk. The Marine Products Export Development Authority (MPEDA) fears a sharp decline in farm gate prices, hurting thousands of coastal and rural livelihoods.

“This sector had been a bright spot for Indian agriculture, encouraging generational continuity in farming. But with the US market accounting for 40% of our shrimp exports, this will hurt farmers hard,” warned Devroop Dhar, MD of Primus Partners.

Divya Kumar Gulati of CLFMA urges urgent policy support to expand to Europe and Southeast Asia, along with public-private investment in aquaculture infrastructure.

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