Trump's 25% tariff, penalties raise alarm: Indian exporters fear order cancellations; urgent support sought from government

Time of India

a day ago

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Businesses are expressing worry about potential order cancellations from American clients, given the 25% duty on Indian products, which exceeds rates for rival nations like Bangladesh, Pakistan and Vietnam, alongside an additional penalty causing uncertainty.
During discussions with commerce and industry minister Piyush Goyal, various sector representatives, including textiles, steel, engineering and agriculture, reportedly requested swift implementation of an Export Promotion Mission, US market assistance, and interest equalisation for export credit.
'Exporters spoke about the adverse effects of tariffs. They want support,' said an official, quoted by Economic Times.
Since August 7, the US will be implementing a uniform 25 per cent duty on all Indian goods, plus a penalty. This substantial duty could affect nearly 50% of India's US exports, which exceed $85 billion.
A textile sector spokesperson highlighted that the 25% duty puts India at a disadvantage compared to competitors who face lower tariffs.
Industry representatives indicated that a 20% rate could have been shared amongst importers, exporters and consumers, but the current 25% necessitates fiscal support, such as enhanced benefits under the Rebate of States and Central Taxes and Levies scheme.
The textile sector warned about possible job losses, as America represents one-third of India's textile exports, with the higher duty potentially reducing business. "The US market is price sensitive with lower design elements. The impact will be visible on core sport items like T-shirts and home textiles from September when the peak season for textiles starts," the textile industry representative said, as quoted by ET.
America was India's primary export market in fiscal 2025, with exports worth $87 billion, representing approximately 20% of the total $437 billion.
"Had an insightful interaction today in Mumbai with leading industry captains from India's vibrant textiles sector. Discussed bold ideas to enhance global competitiveness, sustainability, innovation & value chain integration. Together, we're weaving India's rise as a global textiles powerhouse," Goyal wrote in a post on X.
"Held a productive dialogue with major steel producers in Mumbai. Focused on ideas like advanced tech adoption, reducing logistics costs, increasing iron ore production, and expanding India's role in global value chains by making our MSMEs more competitive. Looking forward to a collaborative road map ahead to forge a resilient & future-ready steel industry," he added.
Also read:
Forced pivot from Russian crude oil after Trump's 'penalty' could cost India $9–11 billion- What analysts say
Industry participants noted unclear penalty guidelines limiting orders and requiring incentives. Additionally, uncertainty about Russian import-related penalties and unspecified landed costs deterred buyers from placing orders.
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