TFP Bureau, New Delhi, August 10, 2025: The recent decision by the United States to impose a steep 50% tariff on Indian goods has triggered an immediate backlash from American buyers, with companies including Amazon halting imports from India. Industry sources say the impact has been swift and severe, with the textile sector bearing the brunt of the move.
Pearl Global, a leading Indian garment exporter supplying brands such as Gap and Kohl’s, reported receiving late-night calls — midday in the US — instructing the company to suspend shipments. An official said several clients also conveyed the decision via email, warning that unless the increased tariff is absorbed into the selling price, they would stop sourcing from India.
“Customers Are Asking Us to Move Out of India”
He told to media that some American buyers have suggested shifting production to countries such as Bangladesh, Indonesia, Vietnam, or Guatemala, where US tariffs remain significantly lower. “We have asked our partners for time to consider options,” he said, adding that the tariff shock has made Indian goods uncompetitive in the US market.
Until recently, the trade scenario had favoured India. In April, the Trump administration had imposed lower tariffs on India compared to Bangladesh, Vietnam, and China, prompting hopes of an export boost. That advantage has now reversed sharply — with the US levying 50% duty on Indian goods, compared to 20% on Bangladesh and Vietnam, and 30% on China.
Half of Business at Risk
With half of Pearl Global’s revenue dependent on US orders, the new tariffs pose a serious challenge. While some buyers have expressed willingness to continue sourcing from India, they insist the exporters themselves should absorb the duty — a demand is not feasible says the officials.
The 50% duty is being implemented in two stages: 25% took effect last Thursday, while the remaining 25% is scheduled for August 28. US authorities have linked the measure to India’s continued purchases of Russian oil, framing it as an economic retaliation.
For now, Indian exporters are bracing for significant losses and considering shifting manufacturing bases abroad to remain competitive in the American market. The textile sector, which had hoped to benefit from earlier tariff advantages, now finds itself scrambling to adjust to a rapidly changing trade landscape.
