India’s exports across sectors to suffer a blow if US tariffs double to 50%

The decision by Washington to double tariffs could severely impact exports of garments, gems and jewellery, handicrafts, seafood, and leather goods.
| Photo Credit:
FRANCIS MASCARENHAS

India’s exports to the US across sectors such as garments, gems & jewellery, handicrafts, seafood and leather products are set to be a dealt a debilitating blow if Washington goes ahead with implementation of the decision to double tariffs on the country to 50 per cent from August 27.

“The Commerce Department has carried out extensive consultations with various sectors to find out the extent to which exports will take a beating. Exporters across sectors fear that if the additional 25 per cent tariffs are imposed, they may lose some of their US buyers for good. The government is trying to expedite a relief package which may be part of the export promotion mission to be implemented shortly,” a person tracking the matter told businessline.

While exporters have been trying to meet the challenge of 25 per cent reciprocal tariffs imposed on India on August 7, almost all sectors would take a severe beating if these are doubled.

“Except for the exempted categories, exports will drastically fall across sectors once the tariffs on Indian exports are doubled to 50 per cent,” said Ajay Sahai, Director General, FIEO.

Exports to some leading brands, which have margins to absorb the duty and also adhere to social compliance, may continue, but this too would happen only for a season or two, he said.

Handicrafts under pressure

In a recent meeting with Textiles Minister Giriraj Singh and senior officials from the government, the Export Promotion Council for Handicrafts pointed out that due to the extreme US tariffs, handicraft exporters were under extraordinary pressure as there were large-scale order cancellations. Also, there was intense competition from countries with better tariff terms. “We urged the government to act swiftly with both fiscal and diplomatic interventions to safeguard this sector’s future,” the EPCH said in a statement.

Other export promotion councils, including from sectors such as apparel, leather, and gems & jewellery, too, have made requests for similar interventions.

Recent statements coming from senior US officials have indicated that Washington may be inclined towards implementing the higher tariffs on India on August 27.

Last week, White House Trade Advisor Peter Navarro said that he saw US tariffs on India doubling on August 27 as announced as it was not recognising its role in the bloodshed and was helping perpetuate Russia’s war on Ukraine by refining its oil.

Vance said in an interview on Sunday that the secondary tariffs on India announced by US President Donald Trump was an “aggressive economic leverage,” to try to make it harder for the Russians to get rich from their oil economy.

The government is already working on a support package under the Export Promotion Mission to provide affordable credit and other incentives to improve market access and there is likely to  be more focus on items hit by the US tariffs.

India’s annual exports to the US in FY25 were valued at $86.7 billion, which about a fifth of the country’s total goods exports. About 53 per cent of the country’s US exports are affected by the increased tariffs.

Published on August 25, 2025