India is a major exporter of goods, including garments, shrimp, gems and jewelry to the US. “Across Tiruppur – which contributes to a third of India’s $16bn (£11.93bn) exports of ready-to-wear garments to brands such as Target, Walmart, Gap and Zara – there’s acute anxiety about what the future holds” (Shukla, Gagdekar & Umakanth, 2025).
As many clients have paused their orders, producers had to pause their expansion plans and benched nearly 250 new workers that were to be hired before the Tariff restriction. The timing was not favorable since stores start to prepare for the upcoming festivities, therefore build stock in advance. Now these producers must really on the domestic market and the Diwali season to sell the already produced products.
“At a 50% tariff rate, an Indian-made shirt that once sold at $10 will cost US buyers $16.40 – far costlier than $14.20 from China, $13.20 from Bangladesh or $12 from Vietnam.” (Shukla, Gagdekar & Umakanth, 2025). So, even if tariffs lower to 25%, India will be less competitive than its Asian peers.
The government has implemented measures to support their producer like a suspension of import duties on raw materials and talks with different countries to diversify their trade.
This has also impacted de India’s gems and jewelry export trade, although they have sign resent partnerships with the Uk and Australia, some companies sell up to 90% of their products to the US. With margins of 3-4%, a tariff like this is unabsorbable to the companies.
Besides, the diamond-cutting and polishing hub had crisis brewing before the instauration of tariffs, with global demand declining and competition from lab-grown diamonds. This has led to factories only working 15 days every month, putting workers on indefinites leaves and a decrease in wages.
Meanwhile, many of the shrimp farmers are considering changing their product. Thota Jagadeesh exported told the BBC: “This is the peak season for US buyers preparing for Christmas and New Year sales. Farmers here are just starting their new cultivation cycle. Trump’s tariffs caused great confusion. We’re unable to make any decisions”. Producers are expecting a cut in production up to 30%. This will affect family producers and others indirectly, which is alarming for India since they have struggle in the creation of new jobs.
The situation is still uncertain, although further conversations were set up for this week, the have been postpone. This under the argument of India’s business deals with Russia and China. India depends now on US president agenda and how urgent they find this matter.
Umakanth, A. S. R. G. &. G. (August 25, 2025). Donald Trump: Inside the Indian factories hit hard by US’s 50% tariffs. https://www.bbc.com/news/articles/c98lr56mznjo