50% tariff tsunami puts $47 billion in Indian exports at risk — These sectors to suffer most

New Delhi, Aug 25: A steep 50 per cent tariff on Indian goods entering the United States will kick in from August 27, putting several of India’s labour-intensive export sectors at risk — including shrimp, apparel, leather, and gems & jewellery.

According to a U.S. notification, the new duties will apply to Indian products “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Daylight Time on August 27, 2025” (9:31 a.m. IST).

At present, Indian exporters already pay a 25 per cent duty. The fresh 25 per cent hike comes as a penalty for New Delhi’s continued purchases of Russian crude oil and military equipment.

Sectors in the Firing Line

•    Gems & Jewellery: The U.S. accounts for nearly one-third of India’s gems & jewellery exports. The polished diamond segment is expected to be hardest hit, already under pressure from lab-grown diamonds.

•    Textiles & Apparel: With annual exports worth $10.3 billion, textiles are among the most vulnerable sectors. “The sector could see a sharp decline in orders,” said Mithileshwar Thakur, Secretary General of AEPC.

•    Seafood (Shrimp): India’s shrimp exports, heavily reliant on the U.S. market, face severe disruption.

•    Leather: A traditional labour-intensive industry, leather exporters fear losing market share to Vietnam and Bangladesh.

•    Electronics: India’s largest export segment (17.6%) has partial exemptions, with select products temporarily spared.

•    Pharmaceuticals: A rare bright spot — pharma exports, nearly 35 per cent of which go to the U.S., remain exempt.

Wider Impact

Exporters warn that nearly 55 per cent of India’s $87 billion shipments to the U.S. could be affected, opening space for competitors such as Vietnam, Bangladesh, and Sri Lanka. “U.S. buyers have already stopped placing new orders. Exports could drop by 20–30 per cent from September,” said Pankaj Chadha, president of the Engineering Exports Promotion Council.

Some firms are front-loading consignments ahead of the deadline. This was reflected in July trade figures: India’s goods exports to the U.S. jumped 19.9 per cent year-on-year to $8.01 billion, while imports rose 13.7 per cent to $4.55 billion.

Government Response

The Indian government has promised relief measures, including higher subsidies on bank loans and support for market diversification. But exporters fear the impact will be “prohibitive” and could drive Indian goods out of the U.S. market.