Trump Tariff Effect: Indian Exporters Face Major Order Cancellations | Business News
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Business owners of both countries spent sleepless nights making frantic calls to each other, trying to salvage deals that now hang by a thread
News18
As the tariff exemption granted by US President Donald Trump has officially lapsed, Indian exporters are currently grappling with a sudden jolt that has disrupted trade ties, put massive orders on hold, and sparked panic across industries.
From August 7, the United States has imposed a 25% tariff on several Indian exports, and the impact has been swift and severe. Business owners of both countries spent sleepless nights making frantic calls to each other, trying to salvage deals that now hang by a thread. Even more troubling is the looming threat that this tariff may double to 50% from August 27.
“The American buyer asked him, ‘After the imposition of 25% tariff, they will be burdened with 15% import duty. When it increases to 50% in future, it will not be possible to bear this load. We are not making any such product which cannot be found anywhere else’,” said CEO of a garment export company handling shipments worth Rs 600 crore annually. His voice, reportedly heavy with stress, reflected not only personal anxiety but the fear that more than 8,000 of his employees could lose their livelihoods if orders keep getting cancelled. The CEO, requesting anonymity, added, “If the bank hears about this, the next call will come from them.”
The tariff blow has spared no sector. Thomas Jose, director of the Kerala-based Choice Group, which exports prawns worth Rs 900 crore annually, said, “Last night most of my American buyers have said to stop the shipment.” His family has been in the prawn export business for three generations. Now, with no margin to accommodate the hike, buyers are pressing pause.
According to trade data, India exports over Rs 25,000 crore worth of marine products to the US every year. But industry insiders fear this may nosedive unless there’s urgent intervention.
The jewellery sector has also been rocked. Vijay Kumar Mangukiya, Managing Director of Surat’s Dhani Jewels, revealed, “Last night I got a call from an American buyer and asked if we can negotiate on the price of diamonds.” The buyer hoped to cushion the impact of Trump’s 25% tariff. “We can negotiate on the price up to 25% tariff, but after 50% is imposed, it will become impossible,” said Mangukiya. The buyer is now considering passing the added cost to retail consumers but if that fails, cancellation is inevitable.
The textile industry is facing similar threats. One exporter of 2 lakh trousers to the US recounted how his buyer said they were “ready to bear the increased cost after 25 percent tariff”. But after the exporter declined any further compromise, the American buyer threatened to shift the order to Bangladesh.
India currently supplies about 28% of America’s total textile imports, roughly Rs 87,525 crore worth of goods. “At present this industry is not in a position to bear 50 percent tariff,” said Vijay Agarwal, Chairman of the Indian Textile Export Promotion Council.
Some exporters have already started scaling back operations. “We have started reducing production. We had not anticipated 50 percent tariff. This is a very heartbreaking decision,” said Parimal Udani, former Chairman of the same council.
In Surat, the heart of India’s diamond industry, the anxiety is palpable. “American buyers have put their orders on hold,” said Adil Kotwal, President of the Gems Jewellery Manufacturers Association, adding, “If some action is not taken soon, then not only will the export of Rs 20,000 crore to the US be affected, but more than 1 lakh workers of this sector will also be in trouble.” He warns that the fate of nearly 8 lakh people dependent on the diamond industry could be in jeopardy.
Amid these developments, tensions between Indian exporters and American buyers have also touched on geopolitical concerns. According to The Times of India, discussions between the two sides have included pointed questions about India’s oil purchases from Russia. One American buyer reportedly asked, “Why do you need Russian oil?,” underscoring the complex intersection of politics and trade that’s now clouding business negotiations.
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