Facing mounting pressure from the United States’ fresh imposition of a 25 per cent import tariff, Indian exporters across key sectors have urged the government to extend affordable credit and financial assistance to mitigate the anticipated impact.
Industry representatives, including those from food processing, marine products, apparel, chemicals and electrical machinery, met Commerce and Industry Minister Piyush Goyal in Mumbai earlier this week to present their concerns. Officials said exporters requested a support mechanism similar to the production-linked incentive (PLI) scheme to withstand the shock of reduced orders and increased competition.
“Exporters shared issues, which they may face in the American market because of the high duty announced by US President Donald Trump,” an official present at the meeting said. The minister, according to the official, has advised the exporting community to submit their recommendations in writing.
Several exporters raised alarm over soaring interest rates in India, ranging from 8 to 12 per cent or higher depending on the borrower profile—contrasting with much lower central bank rates in competitor nations such as China (3.1%), Malaysia (3%), Thailand (2%) and Vietnam (4.5%). They argued that without subsidised credit, Indian goods will rapidly lose their pricing advantage in the American market.
Particularly vulnerable sectors include apparel and shrimp, where cancellations and deferrals of US orders have already begun. “The situation for sectors like apparel and shrimp is not good. In the coming months, it can impact India's exports to the US, and because of a dip in shipments, there could be job losses,” an industry official said.
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The additional 25 per cent tariff, which comes into force from 9.30 am IST on 7 August, will be levied over and above the prevailing US import duties. Sectors expected to take the hardest hit 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), and electrical and mechanical machinery (USD 9 billion). The US accounts for more than 30 per cent of India’s leather and apparel exports.
According to the think tank Global Trade Research Initiative (GTRI), India’s goods exports to the US could shrink dramatically. Quick estimates suggest outbound shipments may fall by 30 per cent, from USD 86.5 billion in 2024-25 to USD 60.6 billion in the next fiscal.
Sudhir Sekhri, Chairman of the Apparel Export Promotion Council (AEPC), has called for immediate government intervention. “Exporters have their back against the wall and will have to sell below cost to keep their factories running and avoid mass layoffs,” he said.
Arvind Goenka, a plastic exporter from the Delhi NCR region, highlighted the risk of India losing market share to other Asian producers. “The USA has fixed substantially lower tariffs on countries like Vietnam (20 per cent), Thailand (19 per cent) and South Korea (15 per cent), all of which excel in plastic goods production,” Goenka said. “They may encroach into India's share, which currently is USD 2.2 billion annually.”
Footwear exporter Rafeeq Ahmed, Chairman of the Farida Group, warned that unless the Centre steps in with timely relief, India could cede ground to competing nations well before a bilateral trade pact with Washington is finalised.
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