US tariff hike to 50% puts $48 bn Indian exports at risk; exporters seek urgent govt relief
News Summary
The United States has announced an additional 25% tariff on Indian-origin goods, raising total duties on many categories up to 50%, effective August 27, 2025. Indian exporters are bracing for a severe blow, with export bodies warning of job losses, loss of competitiveness, and disruptions in key sectors. The Federation of Indian Export Organisations (FIEO) states that approximately 55% of India's shipments to the US—worth nearly USD 47-48 billion—are now exposed to pricing disadvantages of 30-35%, rendering them uncompetitive against rivals from countries like China and Vietnam. Labor-intensive sectors such as textiles, apparel, seafood (especially shrimp), leather, ceramics, chemicals, handicrafts, and carpets are particularly at risk. FIEO and the Confederation of Indian Textile Industry (CITI) have urged the Indian government for immediate relief measures, including interest subvention, enhanced export credit support, a one-year moratorium on loan repayments, and the expansion of production-linked incentive (PLI) schemes. They also emphasized the importance of trade diversification through FTAs with the EU, GCC, and others, alongside urgent diplomatic engagement with the US.
Background
In 2025, under President Donald J. Trump (re-elected in November 2024), the United States continues to pursue an "America First" trade policy, characterized by a propensity to use tariffs as a tool to protect domestic industries and jobs. This latest tariff hike on Indian goods, pushing total duties up to 50% for some categories, is a direct manifestation of this policy. India has been actively working to boost its manufacturing and export capabilities but faces challenges from global competition and increasing trade protectionism. This tariff increase not only directly impacts Indian exporters' margins and market share but could also be viewed as a tactical move by the US in broader trade negotiations or a response to specific Indian trade practices.
In-Depth AI Insights
What are the true strategic intentions behind the Trump administration's tariff hike on Indian goods? While ostensibly for protecting domestic industries, deeper motives could be at play: - Trade Negotiation Leverage: To pressure India into concessions in other trade areas (e.g., agriculture, digital services) or address US concerns over its trade deficit with India. - Supply Chain Diversification: To incentivize US companies to shift or diversify supply chains away from India, aligning with post-pandemic geopolitical risk management. - Political Signaling: To reaffirm the