Trump’s 50% tariffs are here, Indian exporters scramble for survival

It’s official, US President Donald Trump’s 50% tariffs on Indian goods have come into effect. For India’s exporters, the question now is how to navigate what many are calling the biggest shock of their business careers. Companies across sectors are exploring survival strategies, but the road ahead is far from easy. Smaller exporters, in particular, face limited capacity to adjust, and early signs of job losses are already emerging.

Discounts to keep clients engaged

Agra-based Puran Dawar of Dawar Group is offering discounts to retain existing clients for formal and smart casual footwear. Similarly, Israr Ahmed, director of Farida Group, one of India’s largest footwear exporters, is using discounts to keep international buyers from switching to competitors.

In Gurgaon, Sudhir Sekhri, a major garment exporter and head of the Apparel Export Promotion Council, is willing to provide discounts until the tariff situation stabilises. Contracts are being drafted so that the discounts can be withdrawn if Trump reverses the additional 25% tariff.


“If you can sell, sell it at cost, at least the incremental quantity,” said Pankaj Chadha of the Engineering Export Promotion Council.

“This is a temporary challenge. We will operate at zero margin for a few months and get a little hurt… but that is better than letting your client go away,” Dawar added.

Exploring other markets

Many exporters are looking beyond the U.S. for relief. Dawar is targeting Russia, other CIS countries, and Latin America. Another leather exporter, speaking anonymously, visited China earlier this month to find buyers. Jewellery makers like Colin Shah are focusing on the domestic market, while Arun Kumar Garodia of Kolkata-based Corona Steel Industries is eyeing Latin America and Africa.

“These aren’t easy options,” said Garodia. “A lot of products we export to the US don’t have so much demand in India. In markets like Africa, there are concerns with payments.” His hope is that the 25% extra tariffs won’t last long.

Government steps in

The Indian government is attempting to support exporters by connecting them with global chains and gauging from American buyers how the pain can be eased. Anand of Anand Inc, a Noida-based garments exporter, noted that trade deals with the UK and the proposed EU agreement could open new avenues.

FIEO Director General Ajai Sahai cautioned that diversification will not be straightforward. “China has already moved in a big way in markets such as Europe,” he said.

Frontloading shipments

To beat the tariff deadline, exporters from large companies like Bharat Forge and Gokaldas to smaller players in Ghaziabad and Ambur have rushed shipments over the past 20 days. Farida Group prioritised dispatches to U.S. ports to avoid the 50% tariff rate. Shrimp exporters increased exports in July and August, while gems and jewellery companies accelerated shipments to ensure products reach U.S. retail shelves before the holiday season.

“T-shirts that cost $12 or $15 in U.S. markets have been airlifted by buyers,” said Ashwani Aggarwal of Ludhiana-based Nahar Industries.

Jobs and the near-term outlook

Even with these efforts, the impact on exporters remains severe. Aggarwal said future U.S. orders are uncertain because the 50% tariff is “too high.” Buyers in alternative markets also know Indian exporters are under pressure and are demanding tougher terms.

Early effects on employment are visible. Some dyeing units in Tirupur have reduced operations to five days a week, and layoffs in gems, jewellery, and garment-exporting companies are looming. In shrimp processing units in Andhra Pradesh, overtime has stopped. A jewellery industry executive, speaking off the record, noted that contract worker numbers are shrinking due to lack of new U.S. orders, although permanent skilled staff will be retained until at least December.

If the 50% tariff persists, the situation could deteriorate further, affecting more jobs and smaller exporters competing with larger domestic rivals.

With inputs from TOI