Trump Tariff Threats: Exporters On Edge Over Potential 25% Tariffs As Aug. 1 Deadline Looms

Indian exporters are bracing for a painful few months as the US signals steep tariff hikes of up to 25% on Indian goods starting Aug. 1. Industry leaders say the uncertainty is holding up orders, squeezing margins, and derailing business planning during a crucial sales season.

“Not sure if Trump is certain this time,” said Vijay Agarwal, Chairman of the Cotton Textiles Export Promotion Council (TEXPROCIL). “We were hoping he’ll stick to 10%, thinking it could go till 15%, but the government has drawn red lines so they’re not going beyond that. Trump is clearly not getting what he wants… The industry will have to go through 2–3 months of pain.”

Agarwal warned that a 20–25% tariff “will create problems in industry,” particularly when countries like China and Bangladesh are still negotiating their own deals. “Trade is hurting, orders are not getting released and time to prepare for the festive season is passing by. Exporters are nervous, anxious. There are goods at sea. We don’t know how buyers will respond.”

Ajay Sahai, Director General of FIEO, added that “there’s a definite disadvantage to exporters vis-à-vis Indonesia, Thailand, and the Philippines. We’re seeing potential impact, but to retain market and supply lines both sides will absorb the differential. A three-way split on extra tariff costs between exporters, buyers and possibly consumers is likely.”

Engineering exporters, however, seemed more accepting of the 20% rate. “In fact, with no duty relaxation from our side, 20% is a great deal,” said Pankaj Chadha, Chairman of EEPC India. “The best is 15% with a deal and plenty to give away from our side, so it’s better to take 20% tariff and keep negotiating for some more time, maybe six months.”

Exporters remain hopeful that the proposed India-US Bilateral Trade Agreement (BTA) could eventually bring clarity and stability to the situation.