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regular-article-logo Saturday, 02 August 2025

Exporters brace for US tariff impact as buyers cancel or hold back orders

Plastic product exporter Arvind Goenka said the sector is worried as India’s competing nations such as Vietnam and Thailand are facing lower import duties than India

Our Bureau Published 01.08.25, 10:46 AM
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Exporters are worried about the impact of the 25 per cent tariffs announced by the US from August 1 on Indian goods, as American buyers are either cancelling or holding back orders until there is clarity on the penalty component of the announcement.

FIEO president, S.C. Ralhan, said the industry is waiting for the US executive order to get a clear picture of the tariff and penalty. “I have started receiving communication from my buyers for cancellation of orders. We are a bit worried,” Ralhan, a hand tool exporter from Ludhiana, said.

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Plastic product exporter Arvind Goenka said the sector is worried as India’s competing nations such as Vietnam and Thailand are facing lower import duties than India. “The penalty part is worrisome. If it is imposed in addition to the 25 per cent, then buyers will stop placing orders,” he said.

A leather and footwear exporter said: “US buyers are waiting for clarity. It is creating uncertainty. If the new tariffs are imposed from August 1, about 60 per cent of orders will be cancelled.”

Textiles firms tense

India’s apparel and jewellery exporters are bracing for a drop in orders from their biggest market and could cut jobs, industry executives said.

Key garment exporters, including Welspun Living, Gokaldas Exports, Indo Count and Trident, make 40-70 per cent of their sales in the US. The US is India’s largest market for garments and jewellery, with nearly $22 billion in exports in 2024. India has a 5.8 per cent share in the US garment market, behind China, Vietnam and Bangladesh.

“We were getting ready for expansion, expecting 10-15 per cent tariffs under the US deal,” said Gautam Nair, director at Matrix Design, a subsidiary of Gokaldas Exports. Gokaldas’s US clients include GAP, Walmart and JCPenney.

“Trump’s tariff announcement has come as a shock,” Nair said.

Gems exports to suffer

The US accounts for nearly a third of India’s $28.5 billion in annual gems and jewellery exports. “A blanket tariff of this magnitude will inflate costs, delay shipments, distort pricing, and place immense pressure on every part of the value chain — from lower-level workers to large manufacturers,” said Kirit Bhansali, chair of the Gem & Jewellery Export Promotion Council (GJEPC).

Looking ahead to the US holiday season, exporters are urging the government to find a way to restore stability before September, giving them time to ramp up seasonal production. “Without a trade deal, exports won’t recover,” said one jewellery exporter in Surat. “We’ll be forced to cut production and jobs.”

However, a rice exporters’ body on Thursday termed the 25 per cent US tariff from August 1 as a temporary “hurdle” for rice shipments.

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