US Tariffs Disrupt Indian Exports as Buyers Demand Discounts
Indian exporters are facing mounting challenges as the United States’ newly imposed 26% reciprocal tariff on Indian goods takes effect. In response, US buyers are seeking immediate price reductions of 15% to 20% on existing export contracts. The move has led to widespread uncertainty, with multiple orders now placed on hold and the risk of cancellations looming large across several sectors.
Major Blow to Textile and Jewellery Sectors
Exporters from the textile, apparel, and gems and jewellery industries are bearing the brunt of the tariff hike. These sectors, already sensitive to price fluctuations, are seeing delayed shipments and last-minute renegotiations. US importers, particularly smaller businesses, are struggling with increased customs duties and liquidity constraints, leading them to push Indian exporters for steep discounts or defer deliveries.
Stronger Rupee Adds to Export Woes
Compounding the tariff impact is the appreciation of the Indian rupee, which has strengthened to 85.24 against the dollar. This currency movement is eroding India’s export competitiveness further, squeezing margins for exporters already under pressure from pricing demands and rising logistics costs.
Concerns Over Demand Erosion
There is growing concern among exporters that these developments may lead to a fall in discretionary spending in the US. Higher end-prices driven by tariffs could prompt American consumers to cut back on non-essential purchases, especially in categories like jewellery, garments, and home decor—products where India traditionally holds a strong market share.
Exporters Push for Government Relief
Facing shrinking profit margins and volatile order flows, Indian exporters are calling on the government for immediate intervention. Key demands include the restoration of export incentives, renegotiation of bilateral trade terms, and financial support to absorb part of the tariff impact. Export councils are also urging companies to explore alternative markets to reduce dependence on the US.
Strategic Shifts Ahead
As uncertainty continues, Indian exporters may be forced to rethink their strategies, diversify their buyer base, and ramp up domestic value-addition to retain pricing power. The current crisis has exposed the vulnerabilities of overreliance on a single market and underlined the urgent need for resilient trade planning in an increasingly protectionist global environment.
