the story So Far:
The 50% tariff imposed by the US on imports from India came into force on August 27 by sending waves through the Indian economy and government. Many regions, many of them are labor-intensive, as a major export destination to the US, and many are already looking at a significant dip in demand. The government is cognitive about this and is preparing a plan to support these areas, at least in short term.
How do we know which areas will be the worst affected?
The intensity of the effect of the tariff may appear by looking at three metrics in combination: the amount exported to the US, completely, part of the US in the total exports of the region, and the final tariff that is facing the region.
If an area exports a large amount to the US, the US creates a major part of its total exports, and the tariffs are high, then the pain felt by that area is likely to be more. However, if the US creates a small part in the total export of an area, the effect is likely to be limited.
Which areas are likely to see a serious effect?
According to data from the Ministry of Commerce and Industry, India exported a shrimp of about $ 2.4 billion to the US in 2024–25, giving 32.4% of its total shrimp exports. Earlier, the US had imposed a 10% counters on shrimp from India only. However, in addition to 50% tariff, it now becomes 60%.
Reports suggest that exporter procurement price of shrimp in Andhra Pradesh – Most of India’s source of shrimp – fell by about 20% after 25% tariff on August 7. Current 60% tariffs are likely to further fall prices.
India exported diamonds, gold and jewelery worth $ 10 billion to the US in 2024–25, taking 40% of the total exports in the region. Tariffs have now increased from 2.1% to 52.1%. Hub reports like Surat already suggest that production is underway. The diamond polishing industry of Surat employs about 1.2 million people.
One of the worst hit areas is the possibility of India’s textiles and costume export areas. The export to the US was $ 10.8 billion in 2024–25, with the costume alone for $ 5.4 billion. In addition, American accounts for 35% of India’s apparel exports. The area now has to face the last 13.9% to 63.9% tariff.
Global Trade Research Initiative (GTRI) said in its report, “Tiruppur exporters are participating in the shipment, canceling new styles.” “Noida-Gurugram is frozen for employed capacity expansion and considering it, Ludhiana reported a recession in the demand for yarn and clothes, with working capital under stress, and Bengaluru units preparing for shift cuts as buyers push for offshore production.”
India exported $ 1.2 billion carpets to the US in 2024–25, making 58.6% of the total carpet exports. Tariffs have increased from 2.9% to 52.9%.
Other importantly affected areas include handicrafts, leather and shoes, furniture and beds, and agricultural products such as basmati rice, spices, tea, pulses and sesame.
Which areas will show more minor effects?
India’s organic chemical exports in the US were $ 2.7 billion. This created 13.2% of India’s total exports. The area now has to face the last 4% to 54% import duty. The body, chemles and industry bodies of exporters have already contacted the government for some intervention.
India exported steel, aluminum and copper worth $ 4.7 billion in the US in 2024–25, about 17%of the total exports of these metals.
“While America is not the largest market for Indian metals, it is important for hundreds of SMEs in the Delhi-NCR engineering belt and Eastern Foundry Hub,” said GTRI.
“Tariff threatened to disrupt jobs in stainless steel, aluminum casting, and copper semi-stuff, putting serious pressure on small and medium exporters on US orders.”
India exported $ 6.7 billion machinery and mechanical equipment in 2024–25, giving 20% of its total exports. The region is also expected to face a decline in demand.
Is the government planning to help these areas?
Prime Minister Narendra Modi and Commerce and Industry Minister Piyush Goyal are repeating the ‘Swadeshi’ mantra and asking Indians to ‘vocal for local’, so that the economy can reduce its dependence on exports. Other than this, Hindu On August 13, it was reported that the government is working on a multi-minute plan to reduce the short-term pain of exporters.
Long -term long -term, the government is working with exporting bodies to diversify its export sites and better use existing free trade agreements. Sanjay Malhotra, Governor of Reserve Bank of India, has also said that the Central Bank is ready to provide whatever help can help.
Published – August 28, 2025 10:37 pm IST