The US has slapped a 50% tariff on Indian textile and jewellery exports, doubling down on its protectionist stance.
Shares of key export-reliant companies like Gokaldas Exports and KPR Mill come under pressure as 70% of revenue in some cases comes from the US.
With rivals like Bangladesh and Vietnam enjoying lower duties, India risks losing significant share in key US markets.
Shares of textile exporters took a beating on August 7 after US President Donald Trump signed an executive order doubling tariffs on Indian goods from 25% to 50%, escalating trade tensions between Washington and New Delhi.
The hike, which comes in two phases, with the initial 25% in effect from tonight and the remaining 25% kicking in 21 days later has sent shockwaves through the Dalal Street, grappling stocks of companies that are heavily exposed to the US export market.
Export-dependent stocks such as Gokaldas Exports, Indo Count Industries, Pearl Global, KPR Mill, and Welspun Living are hovering under investor radar. These companies derive 50–70% of their revenue from the US market making them particularly vulnerable.
Consequently, shares of Gokaldas Exports, Indo Count Industries, Pearl Global, KPR Mill, and Welspun Living tumbled 2-3% in trade on August 7.
The textile sector, with exports to the US in the range of $8–8.5 billion, is already facing investor caution. According to a statement by the Indian Texpreneurs Federation (ITF) to CNBC-TV18, the 50% tariff will impact not just these large players but the entire textile manufacturing ecosystem, from yarn to garments.
The move comes at a time when regional competitors like Bangladesh and Vietnam have struck favourable tariff deals with the US. Bangladesh’s tariffs have been slashed to 20% from 35%, while Vietnam has managed to reduce their rates to 20%. The widening gap in duty structures could propel American importers towards these competing hubs, undercutting India’s pricing edge.
Another sector taking a major hit is gems and jewellery, where more than 30% of exports are US-bound. With total exports to the US estimated at $9–10 billion, the new tariffs could render exports from India unviable. Some exporters have already suspended shipments to the US, officials at the Export Promotion Council told CNBC-TV18.
“This sector thrives on thin margins and high volumes. When your biggest buyer market turns protectionist, it’s tough to absorb such a high tax hit,” said Anil Rego, Founder of Right Horizons PMS.
