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US Tariffs India: With United States formally implementing a steep 50 per cent tariff on Indian merchandise exports starting Wednesday, industry leaders have voiced deep concern over the fallout for key sectors including textiles, apparel, engineering goods, gems and jewellery, shrimps and carpets. 

The move, they warn, could render Indian products uncompetitive in the American market, jeopardising lakhs of low-skilled jobs and threatening to slash export volumes by up to 40–45 per cent in 2025-26. Yet, even as they flagged the disruption, business leaders stressed this was not the time for despair, but for resilience--casting the tariff shock as a chance to diversify markets, push reforms and build stronger global alliances.

According to Global Trade Research Initiative (GTRI) estimates, India’s exports to the US could fall to $49.6 billion in 2025-26, from nearly $87 billion last year, as two-thirds of outbound shipments by value will now attract punitive duties. 

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While pharmaceuticals, electronics and petroleum products--about $27.6 billion worth of exports--remain duty free, most labour-intensive sectors face a sharp squeeze.

Also Read:Trump Tariff Impact on India: From carpets to chemicals, gems & jewellery, exporters brace for impact as US levy reaches 50%

Pankaj Chadha, Chairman of EEPC India, called the tariff hike “a big jolt” for engineering exporters, saying it would make Indian products uncompetitive in their largest market, the US.

The 50 per cent tariff on engineering goods is set to make us uncompetitive in our top export markets. When the US imposed a 25 per cent tariff on Indian goods earlier, we thought we would somehow manage and stay competitive vis-à-vis our close rivals, including China, but with the tariff now doubling, we are now in a very disadvantageous position," Chadha noted.

Also Read: CITI seeks Centre's support as US 50% tariff looms over Indian textile, apparel exports

While industry leaders acknowledged the setback, their tone was not one of despair, but of balanced concern with resilience, urging businesses to adapt through diversification, reforms and stronger global alliances.

Rajiv Memani, President of CII, said it was “time to turn challenges into advantage by diversifying trade, promoting MSMEs, strengthening agriculture and building new global alliances.” Echoing that view, CII President-Designate R Mukundan remarked, “We stand by our farmers, manufacturers and MSMEs. With policy support and industry unity, we will overcome this tariff and emerge stronger.”

FICCI leaders also pointed to reforms and strong economic fundamentals as buffers against external shocks. Its President, Harsha Vardhan Agarwal, said, “The next generation GST reforms announced by the Prime Minister will give a further boost to India’s growth.” 

Subhrakant Panda, ex-president of FICCI, struck an optimistic note, saying, “There is always a silver lining in a cloud, and we must now cast the net wider to diversify exports.”

Director General Jyoti Vij framed the challenge as an opportunity: “The coming decade presents an opportunity for India not just to withstand global challenges, but to lead as a driver of prosperity.” 

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The US tariffs may have jolted exporters, but industry leaders are refusing to view it purely as a crisis. Instead, they are casting it as a turning point-an opening to diversify markets and push deeper reforms.

Sanjay Nayar, President of ASSOCHAM, said exporters were already shifting strategy. “The 50 per cent US tariff is a challenge, but exporters are accelerating diversification into Africa, Latin America, Europe and ASEAN. This will only strengthen India’s resolve toward resilience and self-reliance.”

Vice President Amitabh Chaudhary struck a similar note, calling the disruption a chance to fast-track reforms. “Exports support millions of jobs and nearly 20 per cent of GDP. With proactive government measures and innovation, this disruption will accelerate reforms rather than derail growth.”

Yet, the optimism comes with a dose of caution. Market analyst Ajay Bagga warned that the blow to trade flows will be significant. Out of $86.7 billion in exports to the US last year, $55–60 billion worth of shipments now fall under the 50 per cent tariff, he said-potentially triggering a $25–30 billion drop in volumes.

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Shrishti Bisht is a journalist at Zee Biz, where she covers a wide range of topics from IPOs, startups, and market trends to global developments and economic shifts shaping the world. She cl ...LATEST NEWSBy accepting cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.