Steep 50 per cent tariffs to severely impact shrimp, apparel, diamonds exports

The steep 50 per cent tariffs on Indian goods entering the United States of America USA are expected to severely affect exports and job creation in labourintensive sectors such as shrimp apparel leather and gems and jewellery exporters saidThe imposition of an additional 25 per cent penalty on India over and above the existing 25 per cent tariffs will disrupt the flow of Indian goods to its largest export marketThe US accounted for around 20 per cent of Indiarsquos USD 43742 billion worth of goods exports in 202425 and has been Indiarsquos largest trading partner since 202122 In 202425 bilateral trade in goods stood at USD 1318 billion USD 865 billion in exports and USD 453 billion in importsldquoThe 50 per cent tariff is like an economic sanction It would lead to closure of units and job cutsrdquo an exporter from the leather sector saidMithileshwar Thakur Secretary General AEPC Apparel Export Promotion Council said the textiles sector with exports of USD 103 billion is among the worstaffectedldquoThe 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 centhas effectively driven the Indian apparel industry out of the US market as the gap of 3031 per cent tariff disadvantage visavis major competing countries like Bangladesh Vietnam Sri Lanka Cambodia and Indonesia is impossible to bridgerdquo he statedGems and Jewellery Export Promotion Council GJEPC Chairman Kirit Bhansali also warned of the impact citing the sectorrsquos dependence on the US marketldquoFor cut and polished diamonds half of Indiarsquos exports are USbound 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 manufacturersrdquo he said adding that competing hubs such as Turkiye Vietnam and Thailand continue to enjoy significant advantages making Indian products relatively less competitive in the US market due to Indiarsquos 50 per cent tariffAn official from the diamond sector said that diamond cutting and polishing sustains lakhs of jobs across Gujaratrsquos hinterland particularly in Surat Navsari Bhavnagar and JasdanA Kolkatabased seafood exporter said Indiarsquos shrimp will become ldquosuperrdquo expensive in the US hitting competitivenessldquoWe are already facing huge competition from Ecuador as it has only a 15 per cent tariff Indian shrimp already attracts a 249 per cent antidumping duty and a 577 per cent countervailing duty After this 50 per cent the duty will be significantly highrdquo he saidSimilarly a leather exporter noted that some companies have orders for 23 months but US firms are demanding about a 20 per cent discount to retain themldquoConsidering the 50 per cent tariff for India if the discount is not accepted orders are kept fully on hold or cancelled Also if a discount is not given no new orders will be placedrdquo he said adding that firms doing business with the US anticipate a 50 per cent reductionretrenchment in workforce supervisors staff and management due to loss of US businessEconomic think tank GTRI said the US tariffs will affect 66 per cent of Indiarsquos USD 865 billion exports to AmericaldquoThe United Statesrsquo new tariff regime effective August 27 2025 marks one of the most severe trade shocks India has faced in recent years With over twothirds of Indiarsquos USD 865 billion exports to the US now subject to prohibitive 2550 per cent duties critical labourintensive sectors such as textiles gems and jewellery shrimp carpets and furniture face sharp declines in competitiveness and employmentrdquo GTRI Founder Ajay Srivastava saidHe added that Indiarsquos exports to the US are set to fall steeply to about USD 496 billion in FY2026 under Washingtonrsquos new tariff regimeExporters have urged the government to announce measures to mitigate the impact FIEO President SC Ralhan suggested a moratorium on payment of principal and interest for loans up to one year automatic enhancement of existing limits by 30 per cent and collateralfree lending under the Emergency Credit Line Guarantee Scheme ECLGS to ease the stress on affected companiesRalhan also emphasised expanding PLI schemes enhancing infrastructure investing in coldchainstorage assets to strengthen competitiveness and aggressively pursuing market diversification through accelerated FTAs with the EU Oman Chile Peru GCC Africa and other Latin American countries with earlyharvest provisions for labourintensive sectorsldquoSwift coordinated action among exporters industry bodies and government agencies is needed to protect livelihoods reinforce global trade links and navigate this turbulent phaserdquo he saidWith PTI inputs