August 4, 2025

Indian exporters are in a state of alarm as concerns mount over possible order cancellations from US buyers. The source of their worry stems from a recently imposed 25% tariff on Indian goods, which is notably higher than that faced by competitors such as Bangladesh, Pakistan, Vietnam, and Turkey, who enjoy tariffs in the 15–20% range. This development signals a potential threat to nearly half of India's exports, which are valued at over $85 billion to the US. As a consequence, many exporters have gathered to voice their apprehensions during meetings with Piyush Goyal, the Commerce and Industry Minister. The meetings have seen participation from exporters in various sectors, including textiles, steel, engineering goods, and agricultural products. They have called for immediate government support to help stimulate export activities and remedy the adverse effects of the new tariffs. In particular, exporters emphasize the need for an Export Promotion Mission, tailored market support for goods intended for the US, and an interest equalization scheme for pre- and post-shipment export credit. An official involved in the discussions commented, 'Exporters spoke about the adverse effects of tariffs. They want support.' The tariffs, which have been in effect since August 7, along with an accompanying penalty, have led to uncertainty in the trading landscape. These tariffs affect a broad range of Indian-origin goods, and many exporters are concerned about losing their competitive edge. 'Our competitors are slapped with lower tariffs and hence, have a tariff advantage,' articulated a representative from the textile industry, illustrating the significant challenges faced by Indian exporters. He further highlighted that if the tariffs were reduced to 20%, the burden could have been distributed between the importer, exporter, and consumer. However, the steep 25% duty imposes an overwhelming fiscal load that demands increased incentives under the Rebate of States and Central Taxes and Levies scheme. With the US market accounting for a substantial one-third of India’s total textile exports, fear looms over potential layoffs in the sector due to reduced orders stemming from the high tariffs. The textile industry has noted that the US is particularly price sensitive, and this may lead to consumers pulling back from purchasing standard items such as T-shirts and home textiles. As one industry representative pointed out, 'The impact will be visible on core sport items like T-shirts and home textiles from September when the peak season for textiles starts.' Beyond textiles, steel producers are also seeking innovative strategies to enhance competitiveness on the global stage. During the meetings, Goyal interacted with leading industry captains to discuss ideas such as advanced technology adoption, reducing logistics costs, and increasing iron ore production. He emphasized collaboration and the pursuit of a joint roadmap to bolster the resilience of India’s steel industry. Goyal stated in a public post, 'Together, we’re weaving India’s rise as a global textiles powerhouse.' Despite the productive discussions, uncertainty prevails because of a lack of clarity regarding the penalties involved in trade. As one representative pointed out, the details about the Russian import-linked penalty remain vague, resulting in buyers being hesitant to place new orders due to unknown landed prices and duties. 'There is a need for incentives,' expressed the representative, emphasizing the urgent need for government intervention to stabilize the export sector in the face of this tariff crisis. Overall, the upward trajectory of India’s exports, crucial for sustaining economic growth, hangs in the balance as exporters navigate these challenging tariff waters, underscoring the importance of swift governmental action to mitigate adverse effects and support the broad spectrum of Indian industries aiming for global competitiveness.

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Tags: Exporters, Tariffs, Importers, Textiles, Steel, Piyush goyal,