From jewellery to shrimp: What’s hit by the 50% US tariffs on India
New Delhi: A wide range of Indian export sectors from textiles and chemicals to shrimp and jewellery, is bracing for a major blow as the United States imposes a steep 50 percent tariff on goods coming from India. Industry bodies and exporters warn that this move could slash outbound shipments to the US by up to half.
The new tariff decision, announced by former US President Donald Trump on 31 July, comes as a response to India’s continued purchase of Russian oil. Notably, this additional penalty has been applied only to India, other major buyers of Russian oil such as China and Turkey have not faced similar actions.
Which sectors will be affected?
According to think tank GTRI, the increased tariffs will significantly raise the cost of Indian goods in the US market. Here’s how much duty various sectors will face under the new regime:
- Organic chemicals: Additional 54% duty
- Carpets: 52.9%
- Knitted apparel: 63.9%
- Woven apparel: 60.3%
- Textiles and made-ups: 59%
- Diamonds, gold, and related items: 52.1%
- Machinery and mechanical appliances: 51.3%
- Furniture, bedding, and mattresses: 52.3%
The 25 percent additional duty will take effect from 27 August, on top of the existing import duties. Standard duties continue to apply, and the combined rates will now reach an effective 50 percent for many categories.
In 2024–25, trade between India and the United States stood at USD 131.8 billion, with USD 86.5 billion in exports and USD 45.3 billion in imports.
The most impacted sectors by value include:
- Textiles and clothing: USD 10.3 billion
- Gems and jewellery: USD 12 billion
- Shrimp: USD 2.24 billion
- Leather and footwear: USD 1.18 billion
- Chemicals: USD 2.34 billion
- Electrical and mechanical machinery: Approx. USD 9 billion
Exporters sound the alarm
Kolkata-based seafood exporter Yogesh Gupta, MD of Megaa Moda, said Indian shrimp exports will now face stiff pricing competition.
“We are already facing huge competition from Ecuador as it has only 15 percent tariff. Indian shrimp already attracts a 2.49 percent anti-dumping duty and a 5.77 percent countervailing duty. After this 25 percent, the duty will be 33.26 percent from August 7,” he explained.
Industry bodies raise concerns
The Confederation of Indian Textile Industry (CITI) expressed deep concern over the move.
“The US tariff announcement of August 6 is a huge setback for India's textile and apparel exporters as it has further complicated the challenging situation we were already grappling with and will significantly weaken our ability to compete effectively vis-à-vis many other countries for a larger share of the US market,” CITI said.
The body urged the Indian government to take immediate measures to support the sector through this crisis.
Jewellery and MSMEs also hit
Colin Shah, MD of Kama Jewelry, warned that nearly 55 percent of India’s exports to the US would be directly affected.
“The 50 percent reciprocal tariff effectively imposes a cost burden, placing our exporters at a 30–35 percent competitive disadvantage compared to peers from countries with lesser reciprocal tariff,” he said.
Shah added that many orders have already been paused as US buyers reconsider their sourcing decisions.
“For a large number of MSME-led sectors, absorbing this sudden cost escalation is simply not viable. Margins are already thin, and this additional blow could force exporters to lose long-standing clients,” he added.
Search for alternatives and trade deal hope
Yadvendra Singh Sachan, MD of Kanpur-based Growmore International Ltd, said Indian exporters must now look for newer markets to maintain growth.
Meanwhile, trade experts hope that an early conclusion of the India–US bilateral trade agreement could provide some relief.
Negotiations for the first phase of the Bilateral Trade Agreement (BTA) are ongoing, with both sides aiming for a deal by October–November this year.
However, Indian officials have made it clear that there will be no compromises on sensitive issues like agriculture, dairy, or genetically modified (GM) goods.
(Agency inputs)