Exporters didn’t get much sleep on Wednesday night with their phones ringing off the hook as frantic US buyers kept calling. The conversations weren’t pleasant. Orders were put on hold or cancelled after US President Donald Trump doubled the tariff on Indian goods to 50%.
“In the dead of night, one US buyer is asking, why do you need the Russian oil?” said the Indian CEO of a ₹600 crore garment exporting company. “The buyers had asked us to take a burden of 15% tariff when it was at 25% level. Now they say they can't take any of the 50% tariff load. We are not making some unique products which can't be sourced from elsewhere,” said the CEO, his voice heavy with worry, given that the business is at risk as is the livelihood of about 8,000 factory workers.
He didn’t want his identity to be revealed as the banks he’s borrowed from could be next on the phone.
ALSO READ: Indian FMCG giants mull new manufacturing units for exports to US as tariffs bite
Thomas Jose, a third-generation exporter of shrimp products to the US, was on calls with buyers late into the night with most of them asking him to stop shipments. This was the refrain, he said: “We can’t accept anything that has even 1% higher duty above 25%, accepting 50% duty is out of question.” Jose is a director at Kerala-based Choice Group, which clocks annual exports of ₹900 crore, most of it to the US.
India’s seafood exports to the US were worth ₹24,000 crore in FY25
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Vijay Kumar Mangukiya, managing director of Surat-based export house Dhani Jewels, was also on the phone until late.
“Last night I got calls from my US buyers asking whether we could renegotiate prices of diamonds, despite knowing the Trump government has put an extra tariff of 25%. We told them that had the tariff been only 25% we would have negotiated and absorbed a portion of the cost. But at 50% tariff it is impossible to do that,” Mangukiya said. “The US buyers told us that they will have a discussion with the retail jewellers and customers, whether they are ready to pay extra for diamonds. However, if they pressurise us, we will have no choice but to cancel the order.”
Some orders went to a neighbouring country on which the US has imposed a lower tariff.
“I was about to get a purchase order for 2 lakh pieces of trousers from a US buyer. He called me around midnight and asked me if I will be able to bear this additional 25% increase in tariffs. When I said no, he decided to shift the order to Bangladesh,” said one of the country’s top 10 apparel exporters who wanted to remain anonymous.
To be sure, US buyers are also caught in a bind as the festive season for that country is approaching, so shifting orders is fraught with difficulty.
The US accounts for 28% of the annual apparel and textile exports from India, worth a total of about ₹87,525 crore in 2024.
“With 50% tariff, it is period. The trade is in a state of shock,” said Vijay Agarwal, chairman, The Cotton Textile Export Promotion Council (Texprocil).
Manufacturers at the garment hub of Tiruppur in Tamil Nadu export goods worth about ₹21,000 crore annually to the US. They’ve got merchandise worth about ₹3,000 crore, including fabric, finished and unfinished goods, in their inventory that could soon become a liability.
“The patient is in a coma--no treatment is available,” said Kumar Duraiswamy, joint secretary of the Tiruppur Exporters’ Association (TEA). “Ship only those goods that you can load by August 27. Put on hold everything else,” Duraiswamy cited buyers as saying.
While the initial 25% duty takes effect on August 7, the additional 25% levy will come into force after 21 days, according to Trump’s Executive Order issued on Wednesday.
“We have started slowing down production, we can stop cutting fabric. But the goods which are in the pipeline and in the sewing process, must be produced,” said Premal Udani, managing director, Kaytee Corp. and former chairman of the Apparel Export Promotion Council (AEPC).
“This was not expected. It is an astronomical rate. A tariff of 50% is backbreaking.”
Adil Kotwal, president of the Seepz Gems & Jewellery Manufacturers Association, said that US buyers put orders on hold immediately after the 50% tariff announcement.
“Some said that they are hopeful of the tariff coming down on August 27, others said going ahead they will make selective buying,” he said.
“All are seeking clarity at the moment. However, there are no orders for September and October from the US at the 200 exporting units in Seepz (Santacruz Electronic Export Processing Zone), which employs 100,000 people and exports jewellery worth ₹20,000 crore to the US.”
The 800,000 people who work in the diamond centre of Surat are nervous about the future.
“It had been a harrowing night for us when we came to know about the 50% US tariff,” said Vinay Patel, a worker at a Surat diamond cutting and polishing unit.
“All of us went to our factories early in the morning to know whether our jobs were there or not. Till now, the units have not informed us of anything, but the tension continues.”
Fielding Calls Late into the Night
At the receiving end were garment, textile, shrimp and gems and jewellery exporters.“In the dead of night, one US buyer is asking, why do you need the Russian oil?” said the Indian CEO of a ₹600 crore garment exporting company. “The buyers had asked us to take a burden of 15% tariff when it was at 25% level. Now they say they can't take any of the 50% tariff load. We are not making some unique products which can't be sourced from elsewhere,” said the CEO, his voice heavy with worry, given that the business is at risk as is the livelihood of about 8,000 factory workers.
ALSO READ: Indian FMCG giants mull new manufacturing units for exports to US as tariffs bite
Thomas Jose, a third-generation exporter of shrimp products to the US, was on calls with buyers late into the night with most of them asking him to stop shipments. This was the refrain, he said: “We can’t accept anything that has even 1% higher duty above 25%, accepting 50% duty is out of question.” Jose is a director at Kerala-based Choice Group, which clocks annual exports of ₹900 crore, most of it to the US.
India’s seafood exports to the US were worth ₹24,000 crore in FY25
ALSO READ: US tariffs may cost India’s electronics sector up to $30 billion
Vijay Kumar Mangukiya, managing director of Surat-based export house Dhani Jewels, was also on the phone until late.
“Last night I got calls from my US buyers asking whether we could renegotiate prices of diamonds, despite knowing the Trump government has put an extra tariff of 25%. We told them that had the tariff been only 25% we would have negotiated and absorbed a portion of the cost. But at 50% tariff it is impossible to do that,” Mangukiya said. “The US buyers told us that they will have a discussion with the retail jewellers and customers, whether they are ready to pay extra for diamonds. However, if they pressurise us, we will have no choice but to cancel the order.”
Some orders went to a neighbouring country on which the US has imposed a lower tariff.
“I was about to get a purchase order for 2 lakh pieces of trousers from a US buyer. He called me around midnight and asked me if I will be able to bear this additional 25% increase in tariffs. When I said no, he decided to shift the order to Bangladesh,” said one of the country’s top 10 apparel exporters who wanted to remain anonymous.
To be sure, US buyers are also caught in a bind as the festive season for that country is approaching, so shifting orders is fraught with difficulty.
The US accounts for 28% of the annual apparel and textile exports from India, worth a total of about ₹87,525 crore in 2024.
“With 50% tariff, it is period. The trade is in a state of shock,” said Vijay Agarwal, chairman, The Cotton Textile Export Promotion Council (Texprocil).
Manufacturers at the garment hub of Tiruppur in Tamil Nadu export goods worth about ₹21,000 crore annually to the US. They’ve got merchandise worth about ₹3,000 crore, including fabric, finished and unfinished goods, in their inventory that could soon become a liability.
“The patient is in a coma--no treatment is available,” said Kumar Duraiswamy, joint secretary of the Tiruppur Exporters’ Association (TEA). “Ship only those goods that you can load by August 27. Put on hold everything else,” Duraiswamy cited buyers as saying.
While the initial 25% duty takes effect on August 7, the additional 25% levy will come into force after 21 days, according to Trump’s Executive Order issued on Wednesday.
“We have started slowing down production, we can stop cutting fabric. But the goods which are in the pipeline and in the sewing process, must be produced,” said Premal Udani, managing director, Kaytee Corp. and former chairman of the Apparel Export Promotion Council (AEPC).
“This was not expected. It is an astronomical rate. A tariff of 50% is backbreaking.”
Adil Kotwal, president of the Seepz Gems & Jewellery Manufacturers Association, said that US buyers put orders on hold immediately after the 50% tariff announcement.
“Some said that they are hopeful of the tariff coming down on August 27, others said going ahead they will make selective buying,” he said.
“All are seeking clarity at the moment. However, there are no orders for September and October from the US at the 200 exporting units in Seepz (Santacruz Electronic Export Processing Zone), which employs 100,000 people and exports jewellery worth ₹20,000 crore to the US.”
The 800,000 people who work in the diamond centre of Surat are nervous about the future.
“It had been a harrowing night for us when we came to know about the 50% US tariff,” said Vinay Patel, a worker at a Surat diamond cutting and polishing unit.
“All of us went to our factories early in the morning to know whether our jobs were there or not. Till now, the units have not informed us of anything, but the tension continues.”
