- Indian textile exporters face challenges due to a new 25% US tariff increase by President Trump
- US reciprocal tariff on India now totals 50%, with textile tariffs between 59-63.9%
- Textile sector's labour-intensive nature makes it highly vulnerable to tariff impacts
The additional 25% tariff imposed by US President Donald Trump over India's oil imports from Russia has left textile exporters worried, with traders in the country now waiting for financial support from the government to sustain their businesses.
Textile and apparel products are among the most exported products from India to the US. Being labour-intensive, this sector is expected to be among the most affected due to the 25% additional tariff announced by President Donald Trump last evening.
The US reciprocal tariff rate now stands at 50% for India. For textile exports, the applicable tariff rate is between 59-63.9%, the highest among all affected sectors. Besides, mobile phones, cut and polished gemstones, and pharma products top India's export charts, and are also bracing for tariff impact.
Indian exporters will not be able to bear the impact of the additional US tariff, warned Sudhir Sekhri, president of Apparel Export Promotion Council (APEC).
Read: Trump Was Asked Why He's Singling Out India Over Russia Trade. His Reply
"If the Indian government does not provide a fiscal support package to the affected exporters, like the Chinese government is providing to its exporters, this increased reciprocal tariff can create unemployment in the export sector. Textile is a labour-intensive sector. It will be affected the most," Mr Sekhri told NDTV.
What makes the textile sector more vulnerable is a lower US tariff imposed on rival economies, which would work in favour of other countries in the competitive export market. This will raise difficulties for the Indian exporters, said Ajay Sahai, CEO of the Federation of Indian Export Organisations.
"After the additional 25% reciprocal tariff imposed by US President Donald Trump on India, the total reciprocal tariff on India has now become 50%. This will have a very bad impact on India's export sector. The difference in tariffs imposed on Indian exporters and their competitors in the international market will be 30% to 35% in some sectors. It will be difficult for Indian exporters to absorb this additional burden," he told NDTV.
Read: US Hypocrisy? 50% Tariff On India, Zero On EU That Bought Russian Oil
In a calm pushback, the government has defended its oil imports from Russia and snubbed the extra US tariffs as "unfair, unjustified and unreasonable".
The tariff announcement comes ahead of the US officials' visit to India for the fifth round of trade talks. India and the US had begun negotiations for a balanced and mutually beneficial bilateral trade agreement (BTA) in March, with a goal to complete the first phase of the agreement by October-November. Since then, several virtual meetings have been held between the two sides.
