Indian businesses received notices from their US buyers requesting a suspension of shipments of apparel and textiles. The letters, which have been circulated widely, stress that the halt will remain in effect until further notice. According to sources within the export industry, these buyers have also made it clear that they are unwilling to shoulder any additional costs resulting from the tariff hike, placing the burden solely on the exporters.
The imposition of this tariff comes as part of broader trade tensions between the US and India, escalating further after President Trump’s administration sought to balance the trade deficit with India. The tariff increase has drawn criticism from Indian business leaders, with many arguing that the new policy would not only hamper bilateral trade but also have detrimental effects on the broader supply chain in the global retail industry.
The apparel and textile industry, which forms a significant part of India’s export economy, has been a vital source of revenue for thousands of businesses. India is one of the top suppliers of garments and textiles to the US, with a variety of manufacturers exporting items such as T-shirts, trousers, and other clothing essentials. The sudden disruption caused by the US government’s decision has left exporters in a difficult position.
Some industry insiders argue that the move to halt orders will have a ripple effect on the domestic industry, impacting not just exporters but also manufacturers, raw material suppliers, and workers involved in production. Several companies have raised concerns about potential job losses and a downturn in production output due to the lack of overseas orders.
For many US retailers, the situation is also proving to be problematic. Companies like Walmart and Target, who have long relied on Indian suppliers for their competitive pricing and quality, now face challenges in finding alternative suppliers in other countries without incurring further costs. The sudden shift in trade dynamics has left many retailers scrambling for solutions to maintain their profit margins without drastically increasing prices for consumers.
Several Indian exporters, in turn, have voiced their frustration, claiming that they were not given prior warning or adequate time to adjust to the tariff hike. Many say that they were forced to accept orders and shipments under existing terms before the imposition, only to be blindsided by the new developments.
The situation has also put a spotlight on the broader impact of global trade policies on smaller and medium-sized businesses. While large corporations might be better equipped to absorb the blow of such policy shifts, smaller exporters find themselves at a disadvantage, lacking the resources to weather such abrupt changes. The uncertainty surrounding the US-India trade relationship is compounded by an inability to predict whether the tariff hike will be temporary or if further escalations could occur.
The economic ramifications are expected to stretch beyond the textile sector, with the Indian government likely to step in with policy interventions aimed at mitigating the effects of the tariff increase. Indian officials have already begun discussions to address the issue, with calls for reconsideration of the tariff hikes at international trade forums.
Experts suggest that India must look to diversify its export markets to mitigate the long-term effects of US trade policies. Relying heavily on one market, particularly one that is volatile and prone to policy changes, can leave businesses vulnerable to sudden shifts in economic conditions. Exporters are increasingly calling for the strengthening of trade relationships with other nations to reduce dependence on the US market.