Trump Tariff Impact: Indian Exporters Suffer Massive Order Cancellations
Business owners from both nations spent sleepless nights making urgent calls, attempting to rescue deals now hanging by a thread.
With the tariff waiver earlier granted by US President Donald Trump now officially ended, Indian exporters are struggling with a sudden disruption that has shaken trade relations, stalled major orders, and triggered panic across several sectors.
Starting August 7, the United States has enforced a 25% tariff on multiple Indian exports, with the consequences being immediate and harsh. Entrepreneurs from both countries have spent sleepless nights making desperate calls, trying to protect deals that are now on the verge of collapse. What’s even more alarming is the impending risk that this tariff may be increased to 50% from August 27.
“The American buyer told him, ‘After the 25% tariff, they will be further burdened with a 15% import duty. If it rises to 50% in the coming days, it will be impossible to manage. We are not purchasing any item that cannot be sourced elsewhere’,” said the CEO of a garment export firm managing shipments worth ₹600 crore per year. His voice, reportedly strained with worry, reflected not only personal distress but also concern that over 8,000 of his employees may lose their jobs if cancellations continue. The CEO, who did not wish to be named, added, “If the bank comes to know about this, we’ll get a call from them next.”
The tariff hit has affected all sectors. Thomas Jose, director of the Kerala-based Choice Group, which exports prawns worth ₹900 crore annually, stated, “Last night, most of my American buyers told me to stop shipments.” His family has been engaged in the prawn export business for three generations. Now, with no margin to absorb the increased cost, buyers have put orders on hold.
As per trade figures, India exports marine products worth over ₹25,000 crore to the US annually. However, industry veterans worry this number might plunge without prompt government action.
The jewellery industry is also under pressure. Vijay Kumar Mangukiya, Managing Director of Dhani Jewels in Surat, shared, “Last night an American client rang me and asked if we could adjust diamond prices.” The client was attempting to reduce the impact of the 25% tariff. “We can adjust prices to handle the 25% tariff, but if it jumps to 50%, it will be unfeasible,” said Mangukiya. The buyer is now considering transferring the additional cost to retail customers, but if that doesn’t work, the order will likely be cancelled.
The textile sector too is facing a similar crisis. An exporter sending two lakh trousers to the US said his buyer was “willing to absorb the increased price after the 25% tariff.” But after the exporter refused to go beyond that, the American buyer warned that they might shift the order to Bangladesh.
India currently supplies about 28% of America’s total textile imports, worth around ₹87,525 crore. “At present, this industry cannot handle a 50% tariff,” said Vijay Agarwal, Chairman of the Indian Textile Export Promotion Council.
Some exporters have already begun scaling back operations. “We have started cutting down production. We had not anticipated a 50% tariff. This has been a very painful decision,” said Parimal Udani, former chairman of the same council.
In Surat, India’s diamond hub, the worry is intense. “American clients have put their orders on hold,” said Adil Kotwal, President of the Gems and Jewellery Manufacturers Association, adding, “If no action is taken quickly, not only will exports worth ₹20,000 crore be impacted, but more than 1 lakh workers in this field will be in trouble.” He warned that nearly 8 lakh people dependent on the diamond sector could be affected.
Amidst these developments, tensions between Indian exporters and American clients have now extended to geopolitical concerns as well. According to The Times of India, talks between the two sides have also touched upon India’s oil imports from Russia. One American client reportedly asked, “Why do you need Russian oil?”—highlighting how political issues are now complicating commercial negotiations.
