India reels from US tariff hike threat
NEW DELHI
Indian exporters are scrambling for options to mitigate the fallout of U.S. President Donald Trump's threatened tariff salvo against the world's most populous nation.
Many warn of dire job losses after Trump said he would double new import tariffs from 25 percent to 50 percent if India continues to buy Russian oil, in a bid to strip Moscow of revenue for its military offensive in Ukraine.
"At a 50 percent tariff, no product from India can stand any competitive edge," said economist Garima Kapoor from Elara Securities.
India, one of the world's largest crude oil importers, has until Aug. 27 to find alternatives to replace around a third of its current oil supply from abroad.
While New Delhi is not an export powerhouse, it shipped goods worth about $87 billion to the United States in 2024.
That 50 percent levy now threatens to upend low-margin, labor-intensive industries ranging from gems and jewelry to textiles and seafood.
The Global Trade Research Initiative estimates a potential 60 percent drop in U.S. sales in 2025 in sectors such as garments.
Exporters say they are racing to fulfill orders before the deadline.
"Whatever we can ship before August 27, we are shipping," said Vijay Kumar Agarwal, chairman of Creative Group. The Mumbai-based textile and garment exporter has nearly 80 percent exposure to the U.S. market.
But Agarwal warned that is merely triage.
Shipping goods before the deadline "doesn't solve" the problem, he said, adding that he's worried for the future of his 15,000 to 16,000 employees.
The U.S. tariff impact is already being felt in India.
Businesses say fresh orders from some U.S. buyers have begun drying up—threatening millions of dollars in future business and the livelihoods of hundreds of thousands in the world's fifth-biggest economy.
Among India's biggest apparel makers with global manufacturing operations, some are looking to move their U.S. orders elsewhere.
Top exporter Pearl Global Industries has told Indian media that some of its U.S. customers asked that orders be produced in lower-duty countries such as Vietnam or Bangladesh, where the company also has manufacturing facilities.
Major apparel maker Gokaldas Exports told Bloomberg it may boost production in Ethiopia and Kenya, which have a 10 percent tariff.
