Major US retailers halt orders from India after Trump imposes 50% import tariff: Sources

Leading American retailers have reportedly halted orders from Indian suppliers following US President Donald Trump’s imposition of a steep 50 percent tariff on imports from India, sources said.

According to NDTV, exporters said they have received emails and formal communication from US buyers urging them to pause all shipments of apparel and textiles until further notice. The retailers are said to be unwilling to absorb the additional costs and have asked Indian exporters to shoulder the financial burden.

Exporters fear that countries like Bangladesh and Vietnam, which currently face only a 20 percent tariff, may benefit from the shift in demand as buyers explore cheaper sourcing alternatives.

Industry sources estimate that the higher duties could result in a 30 to 35 percent increase in export costs. This is expected to cause a sharp drop in US-bound orders — as much as 40 to 50 percent — leading to a potential revenue loss of $4-5 billion for India’s textile and apparel sector.

Major Indian textile exporters who rely heavily on the US for 40 to 70 percent of their sales are expected to be severely impacted.

The United States is India’s biggest market for textiles and apparel, accounting for 28 percent of the country’s total exports in this category. In the financial year ending March 2025, textile and apparel exports stood at $36.61 billion.

Trump’s tariff decision

The White House on Wednesday issued an Executive Order raising tariffs on Indian imports to 50 percent — a move linked directly to India’s continued import of Russian oil.

“I find the Government of India is currently, directly or indirectly, importing Russian Federation oil... in my judgement I determine it necessary to impose an ad valorem duty on imports of articles from India,” President Trump wrote in the order.

The initial 25 percent tariff came into effect on August 7, with another 25 percent set to be added from August 28, raising the total to 50 percent. The order allows for exemptions for goods already in transit and offers the president the ability to adjust the measure depending on geopolitical developments or responses from affected countries.

The White House cited national security and foreign policy concerns, calling India’s oil trade with Russia an “unusual and extraordinary threat” to the United States.

India responds

India’s Prime Minister Narendra Modi addressed the issue during a speech at the MS Swaminathan Centenary International Conference in New Delhi, stating that India would not succumb to pressure.

“For us, the interest of our farmers is our top priority,” PM Modi said. “India will never compromise on the interests of farmers, fishermen and dairy farmers. I know we will have to pay a heavy price for it, and I am ready for it. India is ready for it.”

India has long resisted opening its agriculture and dairy sectors to global competition, citing the need to protect the livelihoods of millions of rural workers.

(With inputs from ANI)