The United States’ 50 per cent tariffs on Indian goods came into effect , and it will impact exports and job creation in labour-intensive sectors such as shrimp, apparel, diamonds, leather and footwear, and gems and jewellery.
Exporters said the imposition of a 25 per cent penalty on India over and above the 25 per cent tariffs move will disrupt the flow of Indian goods to its largest export market.
The US accounted for about 20 per cent of India’s $437.42 billion worth of goods exports in 2024-25.
The US is the largest trading partner of India from 2021-22.
In 2024-25, the bilateral trade in goods stood at $131.8 billion ($86.5 billion exports and $45.3 billion imports).
“The 50 per cent tariff is like an economic sanction. It would lead to closure of units and job cuts,” an exporter from the leather sector said.
An apparel exporter said the textiles sector, with exports of USD 10.3 billion, is one of the worst-impacted segments.
“The industry was reconciled to the 25 per cent reciprocal tariff announced by the USA, as it was prepared to absorb a part of the tariff increase. But the additional burden of another 25 per cent… has effectively driven the Indian apparel industry out of the US market as the gap of 30-31 per cent tariff disadvantage vis-a-vis major competing countries like Bangladesh, Vietnam, Sri Lanka, Cambodia and Indonesia is impossible to bridge,” the exporter said.
Gems and Jewellery Export Promotion Council (GJEPC) Chairman Kirit Bhansali has said there is a significant dependency on the US market.
“For cut and polished diamonds, half of India’s exports are US-bound. With this tariff hike, the entire industry may come to a standstill, placing immense pressure on every part of the value chain, from karigars (artisans) to large manufacturer,” he has said, adding that competing manufacturing hubs such as Turkiye, Vietnam, and Thailand continue to enjoy significantly, making Indian products relatively less competitive in the US market due to India’s 50 per cent tariff.
This imbalance, he said, if unaddressed, could erode India’s long-standing position as a key supplier to the US.
