US Retailers Halt Indian Imports Following Tariff Increase

Major US retailers, including Amazon, Walmart, Target, and Gap, have suspended orders from India in response to a significant tariff increase imposed by US President Donald Trump. The new 50 percent tariff on Indian goods has prompted these companies to pause their apparel and textile shipments from India, as reported by sources to NDTV Profit.

Impact on Indian Exporters

Indian exporters have been receiving communications from their US buyers, requesting a halt in shipments until further notice. The buyers are reluctant to bear the increased costs resulting from the higher tariffs and are instead urging Indian exporters to absorb these additional expenses. This situation poses a significant challenge for exporters who are already operating on thin margins.

Financial Implications of the Tariff Hike

The increased tariffs are expected to raise costs by 30 to 35 percent for Indian exporters. This financial strain could lead to a substantial reduction in orders bound for the US, with estimates suggesting a potential drop of 40 to 50 percent. The resulting loss could amount to approximately $4-5 billion, severely impacting the Indian textile and apparel industry.

Competitive Pressure from Bangladesh and Vietnam

Exporters such as Welspun Living, Gokaldas Exports, Indo Count, and Trident, which rely heavily on the US market for 40 to 70 percent of their sales, now face the risk of losing business to competitors in Bangladesh and Vietnam. These countries are subject to a lower tariff rate of 20 percent, making them more attractive options for US buyers seeking cost-effective alternatives.

Significance of the US Market for Indian Exports

The United States is the largest market for Indian textiles and apparel exports, accounting for 28 percent of total exports valued at $36.61 billion in the fiscal year 2024-25. The current situation underscores the vulnerability of Indian exporters to changes in international trade policies and highlights the need for strategic adjustments to maintain competitiveness in the global market.