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The Federation of Indian Export Organizations warned on Wednesday. Indian exporters would be severely impacted by the United States’ additional 25% tariff on goods from India. That doubled existing levies and went into effect this morning as a “penalty” for purchasing Russian weapons and crude oil.
The FIEO told that two-thirds of the $86.5 billion in goods and services that India exported to the US in FY25. Most of any nation will be impacted by Donald Trump’s absurd tariffs.
In particular, competitors from China, Bangladesh, and Vietnam all pay lower tariffs. It will take advantage of the 35% pricing disadvantage that $48 million in exports will now experience.
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To support his argument, FIEO President SC Ralhan mentioned the shrimp and textile industries. According to him, shrimp exporters, who depend on the US market for 40% of their sales, suffer large losses, and production has already stopped in textile hubs like Tirupur in Tamil Nadu.
According to him, other sectors are also at risk, such as the leather, ceramic, and handicraft industries.
Mr. Ralhan has urged the government to offer some respite. Such as a one-year reprieve from loan payments and increased exporter funding. More importantly, he pushed the government to expedite trade agreements with other nations in order to open up new markets.
The Global Trade Research Initiative, or GTRI, has also issued a warning about the potential impact on Indian exports. According to a recent report, the value could drop by 43% in FY26 to less than $50 billion. According to a GTRI report, this could reduce India’s GDP by almost 1%.
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Up to 30% of India’s exports will continue to be duty-free. According to the GTRI report. The remaining 66%, which comprises the furniture, shrimp, textile, and gem industries, will be impacted.
In the textile industry, where India has increased its market share over the last five years despite China’s decline. The US is India’s top export destination. Similarly, with almost a third of India’s $28.5 billion in shipments each year. The US is the largest market for jewelers from that country.
The resilience of the Indian economy, especially its export sector. It could end FY26 with a slight 2.3% increase despite Trump’s tariffs, could counteract this, though.
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At the same time, a State Bank of India report indicated that tariffs on India might ultimately burden the US economy. Increasing inflationary pressures and affecting growth.
According to the report, the new tariffs could have a 40–50 basis point impact on US GDP. The economy is also likely to experience higher inflation of input costs.
Even though the future of a trade deal, which was postponed due to US demands for access to price-sensitive dairy and agriculture sectors, is at risk, India has stated that it will resist American pressure.
Indian farmers are an important source of votes, and Prime Minister Narendra Modi has stated that he will “never compromise” their interests.
Although trade between the US and India has grown recently, disputes over market access still pose a threat. Following Mr. Modi’s visit to the White House in February, the two began negotiations on a trade agreement. By 2030, the agreement aims to boost yearly trade to $500 billion.
