US Tariff Shock to Hit Bengal’s Labour-Intensive Leather, Marine, Engineering Exports

The additional 25 per cent tariff imposed by US President Donald Trump on India is set to deliver a major blow to West Bengal’s export-driven economy, with the state’s labour-intensive leather, engineering and marine sectors expecting losses ahead of the festive season, stakeholders said.

The increased levies on Indian products for the country's purchases of Russian oil came into effect on Wednesday, bringing the total amount of tariff imposed on New Delhi to 50 per cent.

Exporters said shipments and even production are "currently on hold", amid geopolitical headwinds, intensified by the US tariffs.

According to trade estimates, the move will impact at least Rs 45,000 crore worth of Indian exports, with Bengal among the "hardest-hit" states.

“Labour-intensive industries are under severe pressure. In marine exports, the maximum of Bengal’s annual shipments may collapse," Yogesh Gupta, regional chairman (east) of the Federation of Indian Export Organisations (FIEO) and a leading marine exporter, told PTI.

The state accounts for 12 per cent of India’s seafood exports, dominated by prawn varieties cultivated in North and South 24-Parganas and Purba Medinipur district.

"Out of the current total exports of Rs 8,000 crore to the US from West Bengal, marine shipments worth at least Rs 5,000-6,000 crore from the state are on direct hit," Seafoods Exporters Association of India (East) chairman Rajarshi Banerji said.

Gupta warned that around 7,000-10,000 jobs in processing units, and many more at the farm level, are at risk as states like Andhra Pradesh will begin to compete with Bengal in non-US markets.

Currently, Andhra Pradesh-based exporters are more focused on the US, with a large presence in the country.

The leather industry also faces the brunt of the increased levies, with the US among its largest buyers.

“Bantala leather hub, near Kolkata, alone employs five lakh people. Only India and Brazil face a 50 per cent tariff, while Southeast Asia enjoys a much lower 19-20 per cent rate, which will kill Indian exports to the US,” said Md Azar, senior vice-president of the Indian Leather Products Association.

West Bengal accounts for nearly half of India’s leather exports, valued at Rs 5,000-6,000 crore annually, with the US absorbing about 20 per cent.

Kolkata, one of the country’s largest leather goods hubs, houses 538 tanneries, 230 footwear units and 436 leather goods facilities.

Industry officials cautioned that the shock may ripple into European markets too, as Kolkata-made goods are often routed through Europe before being shipped to the US.

Exporters are exploring workarounds, including partial production in Europe, to obtain a “Made in Europe” tag for entry into the American market, they said.

The footwear category is expected to be hit the hardest, as it represents 40 per cent of global leather exports. In FY'25 alone, India’s leather footwear shipments to the US were close to USD 500 million, the industry stakeholders said.

The engineering goods sector is also vulnerable.

Engineering Export Promotion Council's (EEPC) former chairman and a leading casting exporter Rakesh Shah said the US accounts for about USD 20-21 billion of India’s engineering exports, of which nearly USD 1 billion goes from West Bengal.

“Anywhere between 50,000 and 1 lakh jobs in the foundry-related industry of West Bengal are linked to this trade,” he noted.

The Department of Homeland Security (DHS), in a draft order published on Monday, said the increased levies would hit Indian products that are “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am eastern daylight time on August 27, 2025”.

Trump had announced reciprocal tariffs of 25 per cent on India that came into effect on August 7, when levies on about 70 other nations also kicked in.

On August 7, the US president announced doubling tariffs on Indian goods to 50 per cent for India's purchases of Russian crude oil, but gave a 21-day window to negotiate an agreement.