As Trump tariffs take effect on Indian goods, businesses urge govt for urgent strategic support

US President Donald Trump’s tariffs have taken effect, sending jitters down business owners, exporters and experts. Earlier, the tariff had amounted to 25 per cent, but it was later raised to 50 per cent on India’s import of Russian oil.

The calculation behind the tariff math is 25 per cent taxes plus a 25 per cent penalty that has been imposed in response to “threats to the United States by the government of the Russian Federation”, and penalises India for buying Russian oil directly or indirectly.

Nearly half of India’s exports, worth $87.3 billion, will be hit by the 50 per cent tariffs. The sectors that will be affected include textiles, apparel, gems and jewellery, seafood, leather goods, steel, aluminium, copper, organic chemicals and handicrafts.

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Business bodies express concern

The Federation of Indian Export Organisations (FIEO) has voiced serious concern over the US government’s decision to impose an additional 25 per cent tariff on Indian-origin goods, raising total duties on several export categories to as high as 50 per cent, effective August 27, 2025.

The move is expected to significantly disrupt the flow of Indian exports to the US, India’s largest export destination. FIEO President SC Ralhan called the development a major setback, warning that it could severely affect India’s competitiveness in the US market.

Around 55 per cent of India’s exports to the US, valued at approximately USD 47-48 billion, will now face a pricing disadvantage of 30–35 per cent, making them less competitive compared to products from China, Vietnam, Cambodia, the Philippines, and other Southeast and South Asian nations.

Textile and apparel manufacturers in Tirupur, Noida, and Surat have suspended production as rising costs erode their competitiveness. The sector is steadily losing market share to lower-cost producers in Vietnam and Bangladesh.

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Meanwhile, the seafood industry, particularly shrimp exporters, is facing serious risks, as the US accounts for nearly 40 per cent of India’s seafood exports. The tariff hike threatens to cause stockpile losses, supply chain disruptions, and significant distress for farmers.

The Confederation of Indian Textile Industry (CITI) said, “We look forward to immediate upfront support coming in from the government to address the humongous challenge posed to India’s textile and apparel exporters through the 50 per cent US tariff on Indian goods, which is to come into effect from August 27."