India’s Exports at Crossroads: Can New Delhi Navigate the 50% US Tariff Wall?

India’s export sector is staring at one of its toughest challenges in recent years after US President Donald Trump’s decision to slap an additional 25 per cent tariff on Indian goods, taking the total duty to 50 per cent — the steepest globally on Indian exports.

The Federation of Indian Export Organisations (FIEO) warned that the decision has already forced textile and apparel manufacturers in Tirupur, Noida, and Surat to halt production, as cost competitiveness has worsened against rivals such as Vietnam and Bangladesh. “With approximately 55 per cent of India’s US-bound shipments — worth nearly $47–48 billion — now exposed to pricing disadvantages of 30–35 per cent, Indian goods have been rendered uncompetitive,” FIEO president S. C. Ralhan said.

Textiles and Seafood at the Forefront of Crisis

The Confederation of Indian Textile Industry (CITI) flagged that the move could derail India’s ambition of achieving $100 billion in textile and apparel exports by 2030, as manufacturers face cancellations, delays, and shrinking order books. “At stake are countless jobs in the textile and apparel sector and the foreign exchange earnings vital for India’s economy,” CITI chairman Rakesh Mehra said.

Seafood exports, particularly shrimps, are also under stress as the US absorbs nearly 40 per cent of India’s shipments. The higher tariffs, according to exporters, risk stockpile build-up, disrupted supply chains, and farmer distress in coastal states.

Wider Shockwaves Across Export Sectors

The tariff escalation is not limited to textiles and seafood. Other labour-intensive industries such as leather, ceramics, chemicals, handicrafts, and carpets face an equally sharp erosion of competitiveness against producers from Southeast Asia, Europe, and Mexico.

Industry Calls for Government Intervention

Both FIEO and CITI have called on the government to roll out immediate relief measures. These include:

• Fiscal support and raw material policy interventions.

• Interest subvention and export credit support to sustain liquidity.

• A moratorium on loan repayments for up to one year for exporters hit by the tariff shock.

• Easier and cheaper credit for MSMEs through RBI-backed schemes.

At the same time, exporters are urging New Delhi to leverage diplomatic channels with Washington while simultaneously pushing for “Brand India” promotion, global certifications, and innovation-driven competitiveness to withstand long-term trade pressures.

Outlook

The 50 per cent tariff wall imposed by the US has placed India’s exporters at a historic disadvantage in their single-largest market. Without urgent government action and strong diplomatic engagement, industry leaders fear the fallout could not only stall India’s export growth but also undermine employment in several labour-intensive sectors.

Also Read: US Slaps Fresh Tariffs on Indian Goods, Trade Ties Strained Further