Impact of U.S. Tariffs on Indian Exports

Quiet Factories in Tiruppur In Tiruppur, a major textile hub in India, garment factories are falling silent. At N Krishnamurthy’s factory, only a few of the 200 sewing machines are running. Following President Trump’s announcement of a 50% tariff on Indian goods, the future of these factories is uncertain.

An “Embargo” on Indian Goods Trade experts describe these high tariffs as a de facto embargo. India is a major exporter of clothing, shrimp, and jewelry to the U.S. Business owners are anxious; Krishnamurthy has already halted expansion plans and put hiring on hold for 250 new workers as customers pause their orders.

Struggling During Peak Season While the Christmas season is usually the busiest time for exports, factories are now forced to rely on the local Indian market. One underwear factory is stuck with $1 million in unsold inventory. Siva Subramaniam, owner of Raft Garments, worries he will soon be unable to pay his workers’ wages.

Loss of Competitiveness With a 50% tariff, the price of an Indian-made T-shirt jumps from $10 to $16.40. This makes it impossible to compete with products from China, Bangladesh, or Vietnam. Although the Indian government has tried to help by pausing import taxes on raw materials, many fear these measures are coming too late.

The Jewelry and Shrimp Industries The crisis extends beyond clothing:

• Jewelry: In Mumbai and Surat, the $10 billion jewelry export trade is at risk. Demand was already falling due to lab-grown diamonds, and now workers face reduced hours and pay cuts.
• Shrimp: Indian shrimp farmers face total taxes exceeding 60%. Many are now considering switching to other products because they can no longer plan for the future under these trade policies.

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