Apex exporters body FIEO on Tuesday (August 26, 2025) expressed serious concerns over high U.S. tariffs on Indian goods and said that textiles and apparel manufacturers in Tirupur, Noida, and Surat have halted production amid worsening cost competitiveness due to these steep duties.
The U.S. duties on Indian goods will increase to 50% from August 27.
The move will severely disrupt the flow of Indian goods to its largest export market, Federation of Indian Export Organisations (FIEO) President S C Ralhan said.
He described the development as a setback and stated that it can severely impact India’s exports to the U.S., with about 55% of India’s US-bound shipments (worth $47-48 billion) now exposed to pricing disadvantages of 30-35%, rendering them uncompetitive in comparison to its competitors from China, Vietnam, Cambodia, Philippines and other Southeast and South Asian countries.
“FIEO expresses grave concern over the US government’s imposition of an additional 25 per cent tariff on Indian-origin goods – raising total duties on many export categories up to 50 per cent, effective from August 27, 2025,” he said, adding that “textiles and apparel manufacturers in Tirupur, Noida, and Surat have halted production amid worsening cost competitiveness”.
This sector is losing ground to lower-cost rivals from Vietnam and Bangladesh, Ralhan said.
Labour-intensive export sectors such as leather, shrimp, ceramics, chemicals, handicrafts, and carpets would face a sharp erosion of competitiveness, particularly against European, Southeast and Mexican producers, Ralhan added.
“Delays, order cancellations, and negated cost advantages loom large on these sectors,” he said.
Looking at the current emerging scenario, he urged that there is a need for immediate government support, which includes a push for interest subvention schemes and export credit support to sustain working capital and liquidity.
The sector currently requires low credit cost and easy access to credit, especially to MSMEs, with support from banks and financial institutions. Special direction in this regard from the government and Reserve Bank of India is needed, he said.
Ralhan also urges for moratorium on payment of principal and interest for loans up to a period of one year.
Besides, expanding PLI schemes, enhancing infrastructure, and investing in cold-chain/storage assets to strengthen competitiveness and aggressive market diversification through accelerated trade agreements (FTAs) with the EU, Oman, Chile, Peru, GCC, Africa, and other Latin American countries, with a provision for early-harvest for labour-intensive sectors, should be prioritised, he said.
“However, leveraging the negotiating window for urgent diplomatic engagement with the US still remains the key. Yet another approach could be promotion of Brand India & Innovation through enhanced global branding, invest in quality certifications, and embed innovation in export strategy to make Indian goods more attractive globally,” the President said.
FIEO appeals for swift, coordinated action among exporters, industry bodies, and government agencies to protect livelihoods, reinforce global trade links, and navigate this turbulent phase.
“The steps taken now will determine how effectively India withstands external shocks and reasserts its presence in the global export landscape,” he said.
Published – August 27, 2025 01:04 am IST
