Additional levies rattle Indian industry

Industry representatives warn that US President Donald Trump's decision to impose additional duties on India for importing Russian oil could significantly disrupt multiple sectors.

Trump signed an executive order imposing an additional 25 percent tariff on imports from India, raising the total tariffs to 50 percent. India has described Trump's substantial tariffs as "unfair and extremely unfortunate".

Industry experts warn that key Indian export sectors such as textiles, generic drugs, leather, chemicals, footwear, gems and jewelry, and seafood will suffer serious setbacks.

Expressing deep concern over the potential negative impact, the Confederation of Indian Textile Industry referred to it as a major blow to the industry.

"The US tariff announcement of Aug 6 is a huge setback for India's textile and apparel exporters as it has further complicated the challenging situation we were already grappling with and will significantly weaken our ability to compete effectively vis-a-vis many other countries for a larger share of the US market," CITI Chairman Shri Rakesh Mehra said in a statement.

Mehra has sought government help to overcome the situation.

"We request immediate government intervention to offset this huge setback. Exporters have their backs against the wall and will have to sell below cost to keep their factories running and avoid mass layoffs," Sudhir Sekhri, chairman of Apparel Export Promotion Council, said.

The US is a key market for Indian ready-made garments exports, with India holding a 33 percent share in the country's total garment exports in 2024, AEPC said.

Representatives of the Indian domestic pharmaceutical industry are also apprehensive in the wake of the US tariffs.

Indian pharma exports to the US are about $9-10 billion, which is approximately 6 to 7 percent of their total pharma imports by value, while supplying about 40 percent of generics by volume, said Viranchi Shah, former president and current spokesman of the Indian Drug Manufacturers Association.

India's exports of pharmaceutical products to the US were $8.72 billion during 2024, according to the United Nations COMTRADE database on international trade.

Significant disadvantage

The additional 25 percent taking effect on Aug 27 is seen to put Indian exporters at a significant disadvantage compared to countries like Bangladesh, Indonesia and Vietnam, which face tariffs of 19-20 percent.

"The new tariffs are likely to make Indian products substantially more expensive in the US market, with the potential to slash exports to the US by 40 to 50 percent," reported Global Trade Research Initiative, a Delhi-based think tank.

Pawan Kumar, president of the Seafood Exporters Association of India, said, "This is a doomsday for the seafood industry. It will have an effect on the farmers, too."

Kirit Bhansali, chairman of India's Gem and Jewellery Export Promotion Council, said, "The entire industry is in trauma. … The 50 percent tariff will kill the entire industry. We have to find alternate ways to do business with the US."

The US is the largest market for the Indian gems and jewelry sector, accounting for over $10 billion in exports in the last financial year, nearly 30 percent of the industry's total global trade, according to Bhansali.

"Main impact (of the tariffs) will be on labor-intensive products like textiles and garments, gems and jewelry and leather goods," said Manoj Pant, former director of the Indian Institute of Foreign Trade and currently a visiting professor at Shiv Nadar University, New Delhi.

India still has time to negotiate, Pant said.

New Delhi has put on hold its plans to procure new US weapons and aircraft, in India's first concrete sign of discontent after the additional US tariffs, Reuters reported on Friday, citing Indian officials familiar with the matter.

The writer is a freelance journalist for China Daily.