The textile sector will be most affected by this tariff(tariff)   

Washington: The US is going to impose a hefty 50 percent tariff     (tariff)    on labor-intensive goods such as shrimp, textiles, leather and jewelery imported from India from August 27, 2025. This move will have a serious impact on nearly half of India’s exports to the US. This tariff will apply to most of the labor-intensive goods out of the total USD 86 billion trade between India and the US. However, some important products like pharmaceuticals, electronics and petroleum will remain free from this tariff. According to PTI news, according to the official announcement of the US government, this new tariff will come into effect from 12:01 am (Eastern Daylight Time) on August 27. At present, there is already a 25 percent tariff on goods sent from India to America, which will now be increased by an additional 25 percent under the ban on purchasing crude oil and military equipment from Russia.

India’s US exports increased by about 20% in July

According to the news, exporters are calling this heavy tariff “restrictive” and are worried that due to this India’s products will lose their competitiveness in the American market. At the same time, countries like Bangladesh, Vietnam, Sri Lanka, Cambodia and Indonesia will take advantage of the low tariff and gain an edge in the market. Before the tariff increases, some companies are rapidly sending goods to America, the effect of which was seen in the trade figures of July. India’s US exports increased by about 20% in July, while imports have also increased by about 14%. Exports increased by 21.6% from April to July.

Production may have to be stopped

An official from the leather and footwear industry said that the tariff may force companies to lay off employees and halt production until there is clarity on the proposed bilateral trade agreement between India and the US. The agreement aims to increase trade between the two countries from USD 191 billion to USD 500 billion. An exporter from the jewellery industry said that with the US being the largest market, job cuts would be inevitable. He said that a long-term export strategy, interest subsidy, ease of doing business, quick withdrawal of GST and reforms in the SEZ law are necessary to deal with this challenge.

The textile sector will be most affected by this tariff

Mithileshwar Thakur, general secretary of the Apparel Export Promotion Council, said that the textile sector, which has exports worth USD 10.3 billion, will be most affected by this tariff. He said that the industry could bear the already imposed 25% tariff, but the additional 25% has almost excluded the Indian textile industry from the US market. According to economic think tank GTRI, this new tariff policy of the US will affect 66% of India’s exports of USD 86.5 billion. A 50% tariff will be imposed on labor-intensive products worth USD 60.2 billion, including garments, jewelry and shrimp.

Millions of jobs will be at risk
GTRI founder Ajay Srivastava said that this is a major trade shock for India, which will have a huge impact on both the competitiveness and employment of labor-intensive sectors. India’s exports to the US could be around USD 49.6 billion in 2025-26. He said that while there will be no tariff on 30% of exports, 25% tariff will be imposed on 4% and 50% tariff will be imposed on 66%. Exports of these sectors could fall by up to 70%, which will reduce total exports by 43% and put millions of jobs at risk. This will weaken India’s penetration in the US market and affect its participation in the global supply chain.