Trump tariff: 50% duty on Indian goods to slash exports by $37 bn

As the U.S. government begins to levy a 50% duty on exports of textiles, gems and jewellery, shrimp, and a host of other Indian goods from tomorrow (August 27), the impacted sectors could see about a 70% dip in their U.S. exports, says Delhi-based think tank Global Trade Research Initiative (GTRI).

Overall, India’s exports to the U.S. are set to fall steeply - from $86.5 billion in FY2025 to about $49.6 billion in FY2026 - due to Washington’s new tariff regime, GTRI analysis shows.

According to the think tank, the affected sectors together account for over $60 billion, or 66% of India’s exports to the U.S. The tariffs will render apparel, textiles, gems & jewellery, shrimp, carpets, and furniture exports uncompetitive, it says.

“Exports from these sectors could plunge 70%, dropping to $18.6 billion, causing an overall 43% decline in shipments to the U.S. and endangering hundreds of thousands of jobs,” Ajay Srivastava, founder of GTRI, points out.

According to Srivastava, higher tariffs could see farm-gate prices of shrimp collapse in key production hubs like Andhra Pradesh and threaten the survival of processing hubs in Visakhapatnam and West Godavari, while competitors like Ecuador, Vietnam, Indonesia, and Thailand seize market share.

“Diamonds, gold, and jewellery exports face tariffs rising from 2.1% to 52.1%, imperiling jobs in Surat, Mumbai, and Jaipur and pushing U.S. buyers toward Israel, Belgium, China, and Mexico. Textiles and apparel exports will be hit by tariffs of up to 63.9%, devastating clusters in Tiruppur, Noida–Gurugram, Bengaluru, Ludhiana, and Jaipur, with Bangladesh, Vietnam, Mexico, and others expected to replace Indian suppliers," Srivastava says

"Carpet exports face tariffs of 52.9%, jeopardizing livelihoods in Bhadohi, Mirzapur, and Srinagar, while Turkey, Pakistan, Nepal, and China gain. Impact on handicrafts, furniture, and bedding exports risks factory closures across Jodhpur, Jaipur, Moradabad, and Saharanpur, with Vietnam, China, Turkey, and Mexico filling the gap,” he adds.

Not all products will see 50% tariffs imposed by the U.S. administration. In fact, of the $6.6 billion worth of India’s auto component exports to the U.S., $3.4 billion—mainly parts for cars and small trucks—will face a 25% tariff, while the rest will be hit by the full 50% tariff.

Similarly, 30.2% of India’s exports ($27.6 billion) will continue to enter the U.S. market duty-free. This includes pharmaceuticals ($12.7 billion), pharma raw materials or APIs ($2.72 billion), electronics ($8.18 billion), and refined light oil, gasoline, and aviation turbine fuel ($3.29 billion).