The Federation of Indian Export Organisations (FIEO) has expressed significant alarm regarding the United States’ recent decision to implement a 25 percent additional tariff on goods originating from India, effective immediately. This change brings the total duties on various export categories close to 50 percent, jeopardizing India’s market access to its largest export partner. The impact of US tariffs on Indian exports is profound and far-reaching.
FIEO President S.C. Ralhan labeled this development a major setback, highlighting that approximately 55 percent of India’s shipments to the U.S., valued at around $47 to $48 billion, now face severe pricing disadvantages of 30 to 35 percent. This situation renders Indian products less competitive compared to those from countries like China, Vietnam, Cambodia, and the Philippines. The impact of US tariffs on Indian exports is creating significant barriers to trade and economic growth.
Textile and apparel manufacturing centers such as Tiruppur, Noida, and Surat have already reported production halts due to declining cost competitiveness. Meanwhile, other labor-intensive sectors—such as leather, ceramics, chemicals, handicrafts, and carpets—are expected to experience order cancellations and diminished global competitiveness, according to a press release from FIEO.
In light of these challenges, Ralhan called for prompt government action. He proposed several measures, including interest subvention schemes, increased export credit support, low-interest loans for micro, small, and medium enterprises (MSMEs), and a one-year moratorium on loan repayments. He also suggested automatic credit limit increases of 30 percent and the need for collateral-free lending through the emergency credit line guarantee scheme (ECLGS), as well as expanded production-linked incentive (PLI) schemes.
FIEO further stressed the importance of aggressive market diversification by accelerating free trade agreements with the EU, GCC, Africa, and Latin America, along with investments in cold-chain and storage infrastructure. While diversification is vital, Ralhan emphasized the necessity of urgent diplomatic engagement with Washington.
To ensure long-term growth, promoting ‘Brand India’ through global branding, innovation, and quality certifications was also highlighted. FIEO urged coordinated actions between exporters, industry bodies, and the government to safeguard livelihoods and maintain India’s export momentum in the face of escalating trade headwinds.
