Garments, Shrimp, Jewellery & Engineering Exports To Take Biggest Hit From US Tariffs: GTRI

New Delhi, Aug 5 (KNN) India’s exports to the United States could fall by nearly 30 percent in the current fiscal year, from USD 86.5 billion to USD 60.6 billion, if the newly proposed 25 percent import duty by US President Donald Trump is implemented, according to an assessment by the Global Trade Research Initiative (GTRI), reported by PTI. 

The think tank warns that the tariff hike places India among the worst-affected countries in Asia, second only to China, which faces a 30 percent duty.

Under the revised tariff structure, competing exporters such as Vietnam, Bangladesh, and Malaysia are subject to comparatively lower import duties ranging between 15 percent and 20 percent. 

GTRI noted that only a narrow set of Indian exports—including pharmaceuticals, energy products, critical minerals, and semiconductors—are exempt from the higher tariffs.

“This puts Indian exports at a clear disadvantage across most sectors,” GTRI stated, highlighting severe impacts on labour-intensive and high-volume industries. 

Garments are among the worst-hit: knitted and woven apparel exports, each valued at USD 2.7 billion, now face import duties of 38.9 percent and 35.3 percent, respectively—significantly higher than rates imposed on similar products from Southeast Asian nations. 

Likewise, home textile exports such as towels and bedsheets, which generate around USD 3 billion (half from the US), are now subject to a 34 percent tariff.

Shrimp exports, worth USD 2 billion and representing nearly one-third of global supply, also face serious setbacks. The 25 percent tariff removes India's cost advantage against exporters like Canada and Chile, who enjoy tariff-free access to the US market through trade agreements. 

Meanwhile, jewellery exports, valued at USD 10 billion—40 percent of India's global jewellery trade—are now subject to a 27.1 percent duty. Mechanical gold jewellery, worth USD 3.6 billion, is expected to be particularly impacted due to thin margins and limited value addition.

Exports of metals such as steel, aluminium, and copper, totalling USD 4.7 billion, are expected to weaken as US infrastructure and energy buyers seek more cost-effective alternatives. 

Engineering goods—comprising USD 6.7 billion worth of machinery and USD 2.6 billion in auto components—now face tariffs exceeding 26 percent, rendering them less competitive than products from Mexico (which faces no duty) and Japan (subject to 15 percent).

Even in sectors currently exempt, concerns persist. Petroleum exports to the US—valued at USD 4.1 billion—remain duty-free, but India’s reliance on Russian crude could invite penalties. 

Pharmaceutical exports worth USD 9.8 billion and smartphone exports of USD 10.6 billion are also tariff-free for now, though Trump has signalled the possibility of future duties on Indian medicines and increased scrutiny on electronics containing Chinese components.

GTRI cautions that redirecting exports to alternative markets is unlikely to fully offset the potential losses in the US. “Exporting more to other countries to make up for losses in the US market won't be easy,” said GTRI founder Ajay Srivastava.

(KNN Bureau)