Following the imposition of a 50 per cent tariff on Indian goods, major US retail brands including Walmart, Amazon, Target, and Gap have begun suspending readymade garment orders to Indian suppliers, according to a report by NDTV.
The report states that after imposing a 25 per cent reciprocal tariff, the US administration levied an additional 25 per cent tariff on Indian exports to the US as “punishment” for purchasing Russian crude oil. Since then, Indian garment exporters have started receiving emails from US buyers instructing them to suspend purchase orders until further notice.
Quoting industry sources, NDTV reports that US buyers are unwilling to share the burden of the higher tariffs and are asking Indian exporters to absorb the additional costs themselves.
Due to the steep tariff hike, the price of exporting garments from India to the US could rise by as much as 30–35 per cent. As a result, US orders from India may drop by 40–50 per cent, which exporters warn could cause losses amounting to several billion dollars.
Major Indian exporters such as Welspun Living, Gokaldas Exports, Indo Count, and Trident send 40–70 per cent of their total exports to the US. The United States remains the largest market for Indian garments and textiles.
India is the fourth-largest garment exporter to the US, with shipments worth USD 4.69 billion last year. Its main competitors in this market are Bangladesh and Vietnam. With the high tariffs, orders previously placed with India could shift to these two countries. This is because the US administration has imposed a 20 per cent reciprocal tariff on Bangladesh and Vietnam — significantly lower than the 50 per cent now faced by India.
Of the 50 per cent tariff imposed by US President Donald Trump on Indian goods, 25 per cent took effect yesterday (Thursday), with the remaining 25 per cent set to take effect on 28 August.
In a statement, the Confederation of Indian Textile Industry (CITI) said the effective 50 per cent tariff is a matter of deep concern for India. “The US tariffs announced on 6 August are a major blow to India’s textile and apparel exporters. We were already facing challenging conditions, and these new tariffs will make matters worse by weakening our competitiveness in the international market,” the organisation said, urging the government to take swift measures to support the sector during this crisis.
Industry experts also warn that beyond garments and textiles, the higher tariffs will severely impact India’s leather, chemical, footwear, gems and jewellery, and shrimp export sectors.
