Trump's Tariff Announcement Shakes Indian Exporters

American President Donald Trump's recent announcement about a potential "substantial increase" in tariffs on Indian goods has cast a shadow of uncertainty over exporters. This comes at a critical time when the government is considering targeted support for affected industries rather than a broad-based approach.

Christmas Season Orders at Risk

The looming tariff uncertainty is particularly concerning for the upcoming busy season around Christmas. Buyers are likely to compare tariffs across countries before finalizing orders, putting Indian exporters at a disadvantage in competitive sectors like textiles and footwear, where countries like Bangladesh enjoy a tariff advantage.

Unspecified Penalties Add to the Confusion

The situation is further complicated by an unspecified "penalty" on India for its Russian oil purchases, making it difficult for buyers to calculate costs. The fear of additional tariffs being imposed in the coming months may deter buyers from placing orders with long-term Indian suppliers.

Government Seeks Detailed Impact Analysis

Government sources have urged exporters to provide a detailed analysis of sectors that would be hit hardest by the proposed 25% tariff. A broad comparison may not suffice, as other factors, such as production capacity and certification requirements, play a significant role in determining the actual impact.

Select Sectors May Weather the Storm

Not all sectors will be equally affected. For example, India holds a 36% share in the US market for women's and girls' cotton T-shirts, indicating a strong foothold in certain textile segments. Similarly, while Ecuador may benefit from tariff adjustments in the shrimp market, it lacks the capacity to fully replace India's $2 billion exports.