Date: August 2025
President Donald Trump has delivered a major shock to global trade by doubling import tariffs on Indian goods from 25% to 50%. This unprecedented move, aimed at pressuring India over its oil trade with Russia, has left US retailers scrambling for alternatives and Indian exporters bracing for a significant hit.
Why the Tariff Hike Matters
According to reports, the tariff primarily targets Indian textiles, apparel, gemstones, and jewellery, while pharmaceuticals and smartphones remain exempt. Industry experts warn that this could:
- Increase consumer prices in the US.
- Cut down US orders from India by up to 40–50%.
- Cause $4–5 billion losses for Indian exporters.
How US Retailers Are Responding
1. Renegotiating with Indian Suppliers
Many fashion and apparel retailers are now in urgent talks with their Indian suppliers to explore cost-cutting measures or production relocation to low-tariff countries like UAE, Vietnam, or Mexico.
2. Freezing or Reducing Orders
Some buyers have already halted fresh orders until there’s clarity on the long-term impact, while others are reducing their procurement volumes.
3. Discount Strategies to Clear Inventory
To avoid stockpile losses, retailers are offering steep discounts on existing India-imported products.
4. Considering Manufacturing Shifts
The US jewellery industry has described the tariff hike as a “doomsday scenario” and is actively exploring manufacturing hubs in low-duty nations to remain competitive.