US Tariff Shock: Indian Exporters Warn Of Layoffs, Seek Urgent Support

Industry officials said exporters sought schemes similar to the production-linked incentive (PLI) model and called for cheaper credit to remain competitive in the American market.

According to think tank GTRI, India’s goods exports to the US could slump by 30 per cent, from $86.5 billion in FY2025 to $60.6 billion in 2025-26.

Source : Freepik

With just days left before a steep new tariff takes effect, Indian exporters across multiple sectors have appealed to the government for urgent support. Representatives from industries such as food, marine products and textiles met Commerce and Industry Minister Piyush Goyal in Mumbai, pressing for measures to help them weather the impact of the 25 per cent tariff announced by US President Donald Trump.

Industry officials said exporters sought schemes similar to the production-linked incentive (PLI) model and called for cheaper credit to remain competitive in the American market, reported PTI.

“Exporters share issues, which they may face in the American market because of the high duty announced by US President Donald Trump” the report noted citing an official, adding that the minister has invited written suggestions from the community.

High Interest Rates, Cancelled Orders Add Pressure

Exporters highlighted that loans in India cost between 8 and 12 per cent, while rival nations benefit from much lower rates — China’s central bank rate stands at 3.1 per cent, Malaysia’s at 3 per cent, Thailand’s at 2 per cent and Vietnam’s at 4.5 per cent. This cost gap, they warned, makes it harder for Indian firms to compete.

Sectors like apparel and shrimp are already feeling the strain, with reports of US buyers cancelling or holding back orders. Exporters fear this could trigger a fall in shipments and job losses in coming months. “Exporters have their back against the wall and will have to sell below cost to keep their factories running and avoid mass layoffs,” said Sudhir Sekhri, Chairman of the Apparel Export Promotion Council (AEPC).

Key Sectors Face Billions in Exposure

The new tariff, effective from August 7, will be added to existing import duties in the US. Products likely to be hardest hit include textiles ($10.3 billion), gems and jewellery ($12 billion), shrimp ($2.24 billion), leather and footwear ($1.18 billion), chemicals ($2.34 billion) and electrical and mechanical machinery (around $9 billion). The US buys more than 30 per cent of India’s leather and apparel exports.

According to think tank GTRI, India’s goods exports to the US could slump by 30 per cent, from $86.5 billion in FY2025 to $60.6 billion in 2025-26.

Plastic exporter Arvind Goenka warned that India’s $2.2 billion plastic exports are at risk as the US tariff on Indian goods is higher than on rivals such as Vietnam (20 per cent), Thailand (19 per cent) and South Korea (15 per cent). Farida Group Chairman Rafeeq Ahmed added that government intervention is needed urgently “before a trade pact is finalised between India and the US.”