US Retailers Weigh Options As Donald Trump Doubles India Tariff To 50%

NDTV

4 days ago

New Delhi:
Major US retailers have started discussions with Indian textile exporters after US President Donald Trump imposed a 50 per cent tariff on Indian goods, several exporters told NDTV Profit on Friday.
The US is the largest export destination for India's textile and apparel industry. The country accounted for 28 per cent of total textiles and apparel exports valued at $36.61 billion in the fiscal year that ended March 2025.
Higher tariffs are expected to increase costs by 30 per cent to 35 per cent, and could also lead to a 40 per cent to 50 per cent drop in US-bound orders, causing about $4-5 billion loss.
"Brands are having discussions with us to find alternatives and options if we have any additional capacities in regions with lower tariffs," the management at Gokaldas Exports told NDTV Profit.
An exporter based in Tamil Nadu's Tiruppur, a global textile manufacturing centre, said his US buyer has asked him to stop a shipment of cotton T-shirts and dresses worth $80,000, as it was "not possible to pass the extra costs" on to their clients.
"They want us to lower the price," he said on condition of anonymity, citing business concerns.
Some exporters also said they might offer some discounts to avoid an inventory pile-up.
India is the sixth-largest exporter of textiles and apparel in the world. With higher tariffs on Indian goods, the US retailers may move to Bangladesh and Vietnam, which face a 20 per cent tariff.
"The proposed 50 per cent tariff will increase the cost of Indian apparel by 30 to 35 per cent compared to alternatives from countries like Bangladesh and Vietnam," Rahul Mehta, the chief mentor of the Clothing Manufacturers Association of India, which represents around 20,000 manufacturers and exporters, said.
"Why would anyone pay such high rates? It's a very stressful situation... Not only have existing shipments stopped, but we could also see a big drop in export orders, potentially leading to factory closures and unemployment," he added.
Trump's Tariffs On India
Donald Trump has imposed a 50 per cent tariff on India, including 25 per cent that kicked in on Thursday and another 25 per cent due to come into effect on August 28 as a penalty for buying Russian oil.
"I determine that it is necessary and appropriate to impose an additional ad valorem duty on imports of articles of India, which is directly or indirectly importing Russian Federation oil," he wrote in an executive order signed on Wednesday.
India said the US tariffs were "unfair, unjustified and unreasonable".
"The United States has in recent days targeted India's oil imports from Russia. We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India," the Ministry of External Affairs said in a statement.
It said it was "extremely unfortunate" that the US has chosen to impose additional tariffs on India for actions that "several other countries are also taking in their own national interest".
"India will take all actions necessary to protect its national interests," it added.
Two days before Mr Trump's tariffs announcement, New Delhi said it began importing oil from Russia because "traditional supplies were diverted" to Europe after the outbreak of the Ukraine conflict in February 2022.
"The United States at that time actively encouraged such imports by India for strengthening global energy markets stability," the Ministry of External Affairs said in a strongly worded statement.
"India's imports are meant to ensure predictable and affordable energy costs to the Indian consumer. They are a necessity compelled by global market situation. However, it is revealing that the very nations criticising India are themselves indulging in trade with Russia. Unlike our case, such trade is not even a vital national compulsion," it said.
The Ministry stated that the US "continues" to import from Russia uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilisers, as well as chemicals.
It also said the European Union, which has also "targeted" India for importing Russian oil, had a bilateral trade of Euro 67.5 billion in goods with Moscow in 2024.
"In addition, it had trade in services estimated at Euro 17.2 billion in 2023. This is significantly more than India's total trade with Russia that year or subsequently. European imports of LNG in 2024, in fact, reached a record 16.5mn tonnes, surpassing the last record of 15.21mn tonnes in 2022," it said.
"In this background, the targeting of India is unjustified and unreasonable. Like any major economy, India will take all necessary measures to safeguard its national interests and economic security," the statement read.