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December 9, 2025
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- Sun, 14 December 2025
The recent U.S. tariff hike has imposed a flat 50% duty (comprising 25% regular and 25% additional) on several of India’s top export sectors, severely impacting trade flows.
Textiles and apparel, which account for roughly $8.5–9 billion in annual U.S.-bound shipments, face the steepest blow, threatening thousands of small and medium exporters.
Gems and jewellery, worth $10–11 billion in exports, are equally affected, with the risk of losing market share to Thailand and Vietnam.
Auto components, valued at $2.1–2.5 billion, and seafood (especially shrimp) exports of $6–6.5 billion: will also be hit hard, while leather goods and footwear, worth about $700–800 million, may see further decline in already shrinking demand.
Pharmaceuticals, semiconductors, smartphones, and certain energy products remain exempt with 0% tariffs, offering some relief, but the overall impact could affect over half of India’s $77–78 billion U.S. export basket.
1. Textiles & Apparel Startups: These face a combined 50% duty, which could lead to a 20–35% drop in U.S. orders. Startups selling on Amazon, Etsy, or via D2C platforms may see margins erode entirely unless they shift production to low-duty countries like Bangladesh. Many will scale back U.S. marketing spends.
2. Gems & Jewellery Startups – With the same 50% duty applied, these could see 25–40% revenue declines from American buyers, particularly in high-value gold jewellery and diamond-studded products. U.S. wholesalers may switch to Thailand or Vietnam suppliers to avoid the price jump.
3 Auto Components Startups – Startups making niche parts for EVs, bikes, or aftermarket segments face 15–25% order reductions. Larger buyers in the U.S. will consolidate orders to domestic or Mexico-based suppliers to dodge tariffs.
4. Seafood Startups (Shrimp Processing) – The 50% tariff could slash orders by 20–30%, especially for frozen and value-added shrimp products. This is critical for coastal startups in Andhra Pradesh and Gujarat.
5. Leather & Footwear Startups – Already struggling due to global demand slowdown, these could face a 30–45% hit in U.S. sales. Buyers in New York and Los Angeles may prefer Vietnam, which faces lower duties.
Over the past decade, trade between India and the US has expanded significantly, though not without friction. In 2014, bilateral trade in goods and services stood at around 100 billion dollars, driven largely by India’s IT services exports, pharmaceuticals, and textiles, along with US exports of machinery, aircraft, and agricultural commodities. By 2018, trade volumes had crossed 140 billion dollars, but tensions arose over market access and regulatory barriers, culminating in the US removing India from its Generalised System of Preferences program in 2019, which ended duty-free treatment for roughly 5.6 billion dollars of Indian exports.
The pandemic in 2020 caused a temporary dip, but recovery was swift, and by 2022 trade had surged to a record 191 billion dollars, making the US India’s largest single trading partner. However, persistent disputes over tariffs, intellectual property, and digital trade have kept negotiations tense.
The current tariff hikes in 2025 are among the sharpest in recent years and threaten to slow the momentum built over the last decade.
[Credits for header image: Deccan Chronicles
This content is for informational purposes only and does not constitute legal, financial, or investment advice. This has been constituted based on third-party sources. We do not assume any liability for actions taken based on this information.]
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