Textiles, Shrimps, Jewellery Hit with Trump’s Massive New Tariffs; Smartphones & Pharma Spared for Now

US President Donald Trump has hit India with yet another slew of tariffs last night, taking the tariffs levied on several sectors of the country’s economy to 50 per cent. Industry experts have said that domestic export sectors like leather, chemicals, footwear, germs and jewellery, textiles and shrimp are the ones that will be hit hard by this new tariff.

On Tuesday, Trump told the media that he would raise tariffs on Indian goods in the next 24 hours because they are continuing to buy Russian oil, while citing that ‘India has not been a good trading partner’. Sticking to his words, the US President slapped an additional 25 per cent tariff on the country’s exports, raising the total duties to 50 per cent. This, he says, comes as a penalty for New Delhi's continued purchase of Russian oil.

According to think tank Global Trade Research Initiative (GTRI), “the tariffs are expected to make Indian goods far costlier in the U.S., with potential to cut U.S.-bound exports by 40–50%.”

Sectors Hit

According to a GTRI analysis, after the new tariff, organic chemicals' exports to the US will attract additional 54 per cent duty. The other sectors which will attract high duties include carpets (52.9 per cent), apparel - knitted (63.9 per cent), apparel - woven (60.3 per cent), textiles, made ups (59 per cent), diamonds, gold and products (52.1 per cent), machinery and mechanical appliances (51.3 per cent), furniture, bedding, mattresses (52.3 per cent).

Apparel exports to the US touched $10.8 billion in 2024 and India is highly dependent on the American market. The US is India's largest market for textile and apparel exports.

According to an NDTV report, the Confederation of Indian Textile Industry (CITI) said that it is "deeply concerned" about the potential adverse impact of the effective 50 per cent US tariff rate for India.

"The US tariff announcement of August 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-à-vis many other countries for a larger share of the US market," the CITI said. It also urged the government to immediately take steps to help the sector during these testing times.

Kolkata-based seafood exporter and MD of Megaa Moda Yogesh Gupta told NDTV that now India's shrimp will become expensive in the US market.

"We are already facing huge competition from Ecuador as it has only 15 per cent tariff. Indian shrimp already attracts a 2.49 per cent anti-dumping duty and a 5.77 per cent countervailing duty. After this 25 per cent, the duty will be 33.26 per cent from August 7," he said.

In 2024-25, the bilateral trade between India and the US stood at USD 131.8 billion (USD 86.5 billion exports and USD 45.3 billion imports).

The sectors, which would bear the brunt of 50 per cent duty include textiles/ clothing (10.3 billion), gems and jewellery (12 billion), shrimp (USD 2.24 billion), leather and footwear (USD 1.18 billion), chemicals (2.34 billion), and electrical and mechanical machinery (about USD 9 billion).

Sectors Exempted

Among the sectors that have not been hit with any new tariffs from Trump are petroleum products, pharmaceuticals and smartphones.

Last week, when the US President announced the 25% tariff on Indian exports to the US, sectors like smartphones, pharmaceuticals, auto parts and engineering goods, jewellery were affected. India’s smartphone sector was already hit badly by Trump’s tariffs, as a result of which Apple’s iPhones, which were increasingly being assembled in India for US markets may witness price hikes or supply delay.

India in a Tough Spot

The United States has imposed additional tariffs or penalty for Russian imports only on India. However, other buyers such as China and Turkey, have so far escaped such measures.

The 25 per cent duty, announced on July 31, will come into force from August 7, i.e. today.

The additional 25 per cent levy will be implemented by the US from August 27, taking them over and above the existing standard import duty in the US.

Currently, exporters are hoping an early finalisation of the India-US bilateral trade agreement, which might help them in dealing with the tariff challenges.

The negotiations between India and the US are ongoing for an interim trade deal, though there will be no compromise on the red lines with regard to duty concessions on agriculture items, dairy, and genetically modified (GM) products, sources said.

The two countries are negotiating a bilateral trade agreement (BTA) and are aiming to conclude the first phase of the pact by October-November this year.