Trump’s Tariff Hits India: Textile and Jewellery Sectors Suffer Major Blow

The United States has imposed a steep 50% tariff on a wide range of Indian exports, delivering a major blow to sectors such as textiles, leather, gems and jewellery, shrimp, and chemicals. Industry experts warn that the move could slash India’s US-bound exports by nearly half.

Why the Tariff Was Imposed

The decision comes after President Donald Trump on July 31 announced an additional 25% tariff on Indian imports, citing India’s continued purchase of Russian oil as the reason. This hike, which brings the total duty to 50%, will be implemented in two phases:

25% from August 7 (9:30 am IST) Additional 25% from August 27

Notably, this penalty is exclusive to India, with no similar measures applied to other major Russian oil buyers like China or Turkey.

Indian Exporters on Edge

Trade experts and industry leaders are deeply concerned. The Global Trade Research Initiative (GTRI) stated that the new tariffs could make Indian goods significantly costlier in the US, potentially slashing exports by 40-50%.

GTRI also noted that key products will now face sharply higher effective duties:

Organic chemicals: 54% Knitted apparel: 63.9% Woven apparel: 60.3% Carpets: 52.9% Textiles and made-ups: 59% Jewellery, gold and diamonds: 52.1% Machinery and appliances: 51.3% Furniture and bedding: 52.3% $131.8 Billion Trade Relationship at Risk

In FY 2024-25, India-US bilateral trade stood at $131.8 billion, with India exporting $86.5 billion worth of goods to the US. The most impacted sectors now include:

Textiles and clothing: $10.3 billion Gems and jewellery: $12 billion Shrimp: $2.24 billion Leather and footwear: $1.18 billion Chemicals: $2.34 billion Electrical and mechanical machinery: $9 billion

Shrimp Exports Hit Hard

Seafood exporters are especially alarmed. Yogesh Gupta, MD of Kolkata-based Megaa Moda, said, “India’s shrimp was already costlier than Ecuador’s due to existing duties. With the new 25%, the total duty rises to 33.26%, making us highly uncompetitive.”

Textile Sector Sounds Alarm

The Confederation of Indian Textile Industry (CITI) expressed deep concern, noting that the US is India's largest export market for textiles and apparel. The group warned that this hike could "significantly weaken our ability to compete" globally.

"This is a huge setback amid already challenging conditions," CITI said, urging the government to take urgent steps to protect exporters.

Jewellery and MSMEs at Risk

Colin Shah, MD of Kama Jewelry, said over 55% of India’s US shipments are impacted. “Export orders are already being put on hold as US buyers reassess sourcing. MSMEs, in particular, can’t absorb this cost. This could cost exporters long-term clients,” he warned.

Exploring New Markets

Yadvendra Singh Sachan, MD of Kanpur-based Growmore International Ltd, suggested that Indian exporters look to diversify into new markets to sustain growth.

Hopes Pinned on India-US Trade Agreement

Exporters are now hoping for relief through a bilateral trade agreement under negotiation. Talks for an interim deal are ongoing, and both sides aim to conclude the first phase by October-November 2025. However, Indian negotiators have made it clear that no concessions will be made on critical sectors such as agriculture, dairy, and GM products.