Which sectors might be hit probably the most? – Firstpost

The US’ sweeping tariff to the tune of 25 per cent on a variety of Indian exports started in the present day.

US President Donald Trump’s administration has imposed a further 25 p.c tariff on Indian items, citing India’s
continued oil commerce and army cooperation with Russia as justification.

Trump introduced the preliminary tariffs final month after commerce settlement talks between each the nations stalled.

The ultimate stage of the tariff enhance — the extra 25 per cent —
might be carried out from August 27.

Trade leaders, coverage specialists, and exporters have warned that this transfer might considerably alter India’s commerce equation with its largest export market.

Whereas Washington has not imposed related penalties on different main patrons of Russian oil resembling China or Turkey, India has turn into the only real goal of this particular tariff-based retaliation.

Which Indian export sectors have been hit?

The escalation in duties
will have an effect on a broad swathe of Indian export industries, significantly these closely reliant on the US market.

Based on figures from the Ministry of Commerce, India exported items value $86.5 billion to america in FY2024-25.

The sectors most uncovered to the hike embody textiles and clothes, gems and jewelry, leather-based and footwear, marine merchandise, chemical items, equipment, and electrical gear.

Exports within the textile and attire phase alone are estimated at $10.3 billion yearly to the US.

This contains cotton towels, readymade clothes, dwelling textiles, and style attire, with Indian firms like Arvind Ltd, Welspun Residing, and Trident having a big presence within the American market.

Gems and jewelry exports, which have lengthy been a pillar of Indian merchandise commerce, account for practically $12 billion value of shipments to the US yearly.

Leather-based and footwear contribute round $1.18 billion, whereas chemical compounds and chemical merchandise represent one other $2.34 billion in exports.

Electrical and mechanical equipment exports, a rising phase, are valued at roughly $9 billion.

Shrimp and different seafood gadgets additionally make up a substantial $2.24 billion in outbound shipments to the American market.

Who pays what?

Trade suppose tank GTRI has mapped out the seemingly tariff burdens throughout a number of export classes, and the numbers paint a difficult image.

With the brand new levies in place, the duties will stack as much as:

• Knitted clothes: 63.9 per cent

• Woven attire: 60.3 per cent

• Made-up textiles: 59 per cent

• Natural chemical compounds: 54 per cent

• Diamonds, gold, and associated merchandise: 52.1 per cent

• Carpets and ground coverings: 52.9 per cent

• Furnishings, bedding, and mattresses: 52.3 per cent

• Equipment and mechanical home equipment: 51.3 per cent

These are over and above current duties already utilized on Indian merchandise by US Customs. The fast result’s a considerable enhance within the landed value of Indian items, which many patrons are unwilling to soak up.

How have exporters reacted to the tariffs?

Trade reactions have been swift and pointed. Yogesh Gupta, Managing Director of Kolkata-based seafood agency Megaa Moda, informed PTI how the transfer disproportionately impacts shrimp exporters, “We’re already going through big competitors from Ecuador because it has solely 15 per cent tariff. Indian shrimp already attracts a 2.49 per cent anti-dumping obligation and a 5.77 per cent countervailing obligation. After this 25 per cent, the obligation might be 33.26 per cent from August 7.”

Equally, the textile sector, which is already grappling with comfortable international demand and worth volatility, finds itself in a precarious place.

The Confederation of Indian Textile Trade (CITI) expressed its apprehension, “The US tariff announcement of August 6 is a large setback for India’s textile and attire exporters because it has additional sophisticated the difficult state of affairs we have been already grappling with and can considerably weaken our skill to compete successfully vis-à-vis many different international locations for a bigger share of the US market.”

Colin Shah, Managing Director of Kama Jewellery, shared issues over misplaced competitiveness, “Many export orders have already been placed on maintain as patrons reassess sourcing selections in gentle of upper landed prices. For a lot of MSME-led sectors, absorbing this sudden value escalation is solely not viable. Margins are already skinny, and this extra blow might power exporters to lose long-standing shoppers.”

The affect is especially harsh for MSMEs and family-run companies that dominate India’s export clusters in cities like Surat, Tiruppur, Ludhiana and Kanpur.

What about strategic sectors like pharma & metal?

Whereas a lot of the main target has been on consumer-facing exports, strategic sectors are additionally feeling the warmth.

India’s
pharmaceutical exports to the US touched $9.8 billion in FY25, up from $8.1 billion the earlier yr. Though medication are
indirectly affected by the brand new tariff construction, exporters are bracing for oblique repercussions within the type of regulatory hurdles and scrutiny.

American patrons might invoke issues over mental property rights or product pricing to barter higher phrases or shift orders to rivals.

Within the auto part business — which despatched out $2.2 billion value of products to the US final yr — the concern is that the tight value buildings and precision-based manufacturing make these exports significantly weak.

Even a modest decline in orders might power Tier II and Tier III suppliers to scale down manufacturing, with corresponding results on employment.

Indian metal exports to america, value $6.2 billion in FY25, additionally face a sophisticated future. Though diversified, the sector depends on US infrastructure demand.

A good portion of aluminium exports — about $860 million value — might be caught in the identical net of excessive duties and commerce obstacles, probably together with anti-dumping probes beneath Part 232 of US commerce regulation.

One other affected phase is photo voltaic vitality {hardware}. Based on the Institute for Vitality Economics and Monetary Evaluation (IEEFA), practically all of India’s photovoltaic module exports have been directed to america in FY24.

Firms like Waaree, Adani Photo voltaic, and Tata Energy Photo voltaic, which have expanded capability to cater to American demand, now face critical income issues. A sudden lack of market entry or tariff hikes might render their development projections untenable.

What do the US tariffs imply for the Indian economic system?

Whereas sectoral affect seems extreme, a broader evaluation by the PHD Chamber of Commerce and Trade (PHDCCI) gives a considerably tempered view. The Chamber estimates that the tariffs will have an effect on simply 1.87 per cent of India’s international merchandise exports
and have a negligible 0.19 per cent affect on GDP.

Based mostly on 2024-25 knowledge, the full anticipated export affect stands at $8.1 billion. This contains:

• Engineering items: $1.8 billion

• Gems and jewelry: $932 million

• Prepared-made clothes: $500 million

To mitigate the blow, PHDCCI has laid out a number of steps. These embody elevated deal with market enlargement, diversification to newer areas, and bundling methods (like promoting textiles with equipment) to retain competitiveness.

The Chamber additionally advocated for leveraging the Indian diaspora and cultural outreach to spice up volumes and scale back dependency on single markets.

One of the crucial pragmatic suggestions includes organising joint ventures with US-based corporations to fabricate high-duty gadgets domestically, thereby remodeling export actions into home companies and mental property-driven enterprise fashions.

Will India and the US attain a commerce deal quickly?

The 2 international locations are working towards a phased bilateral commerce settlement (BTA), with expectations to finish the primary leg by October or November this yr.

Whereas the talks provide some hope for tariff reduction, sources recommend that India is unwilling to cede floor on
contentious points resembling agricultural imports, dairy sector safety, and genetically modified meals merchandise.

These sticking factors have lengthy delayed complete commerce cooperation between the 2 nations.

However, exporters stay hopeful {that a} deal — even a partial one — might result in momentary exemptions or obligation relaxations for key sectors.

Chatting with PTI, Yadvendra Singh Sachan, MD of Growmore Worldwide Ltd, advised that Indian companies mustn’t stay fully depending on negotiations alone. “Exporters ought to search for new markets to take care of export development.”

This sentiment echoes a rising realisation throughout the export neighborhood that diversification — by way of each merchandise and markets — is important for long-term resilience.

From shrimp farmers in West Bengal to auto part makers in Pune and attire exporters in Tiruppur, the fee pressures might be felt sharply over the approaching months.

Whereas bigger corporations might take up some shocks, smaller gamers will want authorities assist.

With inputs from companies