50% Tariff on Indian Goods Causes Trade Uncertainty
The 50 percent tariff imposed by U.S. President Donald Trump on Indian imports has brought uncertainty for businesses. Businesses are not sure who will end up footing the bill—exporters or importers.
In light of this, large American retailers have suspended imports from India. Large retailers are now examining their sourcing strategy, according to English-language media reports.
Amazon, Walmart, Others Request Indian Suppliers to Halt Exports
Various American firms, such as Walmart, Amazon, Target, and Gap, have reached out to Indian suppliers. These firms have requested wholesalers to cease exporting fashion and apparel goods temporarily.
The reports indicate that American buyers do not want to pay the increased prices due to the tariff increase. Rather, they want Indian exporters to take on the price burden.
Tariff Hike May Raise Indian Product Prices by 30–35%
With the new tariffs, Indian products in the U.S. could increase by 30 to 35 percent. If that is sustained, Indian exporters will lose 40 to 50 percent of their U.S. orders. Industry estimates place this at a loss of $4–5 billion.
Textile Exporters Face Major Impact
Major exporters like Welspun Living, Gokuldas Exports, Indocount, and Trident are dependent to a great extent on the U.S. market. These firms export 40 to 70 percent of their products to the United States. With the tariffs going up, they are concerned their orders will drop significantly.
U.S. Is a Key Market for Indian Apparel
The U.S. has remained the largest buyer of Indian apparel and fashion. During the 2024-25 financial year, India shipped $36.61 billion worth of apparel, of which 28 percent was to the U.S. To put this into perspective, Bangladesh and Vietnam are subjected to only 20 percent tariffs and are consequently more competitive.
Tariff Increase Linked to Russia Oil Purchases
President Trump has condemned India's acquisition of oil from Russia. He had previously imposed 25 percent tariffs, which began on August 7. More recently, he announced a raising of this to 50 percent from August 27.
The tariff increase is set to impact Indian industries like textiles, seafood, and leather goods directly.
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