US Tariff Uncertainty Hits Indian Exporters’ Confidence, Order Books

As India and the US moved into the final leg of trade negotiations, exporters across key sectors began to feel the heat.

Exporters and businessmen from engineering, plastics and pharmaceuticals said delayed tariff decisions from Washington had stalled expansion plans, pushed back new US orders and clouded short-term growth.

Engineering exporters, according to EEPC Chairman Pankaj Chadha, saw a rush to frontload shipments in June and July. "There was a serious amount of frontloading happening. July was on track to surpass June, both record months," he said. He estimated 18% year-on-year growth in shipments, but warned this would reverse soon.

"We foresee a dip in August and September, and the real hit will come in Q1 of 2026." He also said exporters were rethinking long-term investments. "Trump can’t be trusted on trade."

Plastic exports to the US stood at $2.7 billion, but were already showing signs of volatility. Plexconcil Executive Director Sribash Dasmohapatra said orders were held back in June and July due to uncertainty. "We expected clarity in early July. It never came. Everything remained in the air." In May, exports grew just 2%, slower than last year’s pace.

Still, he said the long-term picture remained positive due to India’s ongoing FTA negotiations and market diversification.

Pharmaceutical exports presented a mixed trend. India exported $10.5 billion worth of pharmaceutical products to the US last year, while importing only $833 million.

Pharmexcil’s Namit Joshi said exporters had pushed heavy volumes in March, but April exports fell 7.2% to $898.3 million from $968.8 million a year earlier. May saw a 13.3% rebound to $813.4 million, but new orders slowed again. "Even a 10% tariff would mean an $83 million hit for India, but it is the US that will face difficulty in rebuilding supply chains," he said.

There's plenty of action around India's manufacturing competitors as well. The US had imposed 32% tariff on Indonesian exports, but then reached a deal to cut tariffs to 19% after bilateral dialogues. Starting Aug. 1, goods from Thailand and Cambodia will be charged 36% tariffs, while Bangladeshi goods will also attract 35% tariffs.

NDTV Profit had earlier reported that Commerce Ministry officials are closely monitoring potential tariff differentials that could emerge vis-à-vis other countries.

"We’re in wait-and-watch mode," an official said, noting that the full extent of the impact will only be clear after the Aug. 1 deadline, when the US is expected to firm up its tariff plans. The government is also keeping an eye on order frontloading, which may be affecting trade volumes ahead of potential duties.

The fifth round of negotiations is currently underway in Washington, and a mini deal might also be announced prior to that, around the Aug. 1 mark.