US announcement on tariff and penalty creates fresh uncertainty, leaves exporters on edge

The commercial deal with the United States was before the deadline on August 1 for the mutual tariffs seemed very likely, but US President Donald Trump’s announcement of a 25 % tariff alongside a penalty that did not realize the industry, with concerns about the proposed punishment and the relative competitiveness of Indian loans. Hopes are now linked to the fact that the government is able to finish the first segment of the bilateral trade agreement in the coming months.

According to experts, there will be an effect on exports, which will become more expensive, but accounts can only be made once you know the amount of the punishment. Sources were already talking to buyers about how pricing is a rise in definitions, hoping that at least some of them would be absorbed by buyers. The sources said that the orders were also suspended, and it was hoped that no temporary loss was until the bilateral trade agreement was completed.

Ajay Sahai, General Manager and CEO of Fieo said:

He also said, “Without clarification of the amount of the punishment, the American and imported exporters do not leave the American exporters who do not have any fixed basis to calculate the descending costs or assess how to absorb the burden of customs tariffs. This remains this ambiguity disrupts the supply chain and pricing the United States, which remains fine.

Sources believe that this is a temporary stage, hoping that the post -BTA framework will not only address such unilateral measures, but also opens great opportunities for recovery and growth.

But it remains concern that the high tariff and punishment will affect the competitiveness of Indian exports against competitors such as Vietnam and China. It will also affect local growth, given that the United States is the highest export market in India.

Rahul Ahlia, founder of the Economic Development Foundation, said that the customs tariff by 25 % will leave us worse for both Vietnam and China, the main countries we are competing for for investment and manufacturing. “We must aim to reach an agreement with the United States on commercial policy. We can help sensitive sectors such as agriculture and dairy products through other mechanisms such as direct benefits. This approach will also allow us to implement the reform that affects the need and compliance with our long -term competitiveness and strategic interests.”

The United States imposed a 35 % tariff on exports from Bangladesh. American tariff rates for Indonesia, Vietnam and Cambodia have been fixed by 19 %, 20 % and 36 %, respectively.

“Undoubtedly, the new tariff rate will be seriously testing the determination and flexibility of the fabric and clothing exporters in India, because we will not have a great differential advantage for the duty versus many other countries, except that Bangladesh, which we compete with for the difficulty in the field of difficulty, will become more committed to the tank (scale).

The Industry Authority expects that the issue of customs tariffs will be resolved after BTA between India and the United States and hopes that the government will provide a mechanism to assist exporters in facing the negative impact of American definitions on the textile and clothing sector in India.

On Thursday, Trump announced a 25 % tariff, along with an unlimited penalty, on Indian imports, noting that India is still linking defense and energy relations with Russia. He said: “Remember, while India is our friend, we have, over the years, have done relatively few businesses because the customs tariff is very high, among the highest in the world, and they have the most heavy and hating commercial barriers in any country.” The new tariff will be valid on August 1.

Indian imports of the United States are already facing a higher tariff. The United States has already imposed a 10 % uniform tariff on imports from most countries. The tariffs on steel and aluminum also doubled to 50 %, and on cars and car components to 25 %.

However, the expectation of industry was that there is a limited deal that would be cut between India and the United States that would give exports. In recent days, government officials have been tight on the trade deal negotiations with the United States and indicated that the talks were continuing while India has been committed to protecting sensitive sectors such as agriculture and dairy products.

A team of US officials is scheduled to visit India from August 25 in the sixth round of BTA, and it is hoped that it will be completed by September or October this year.

Cargo exports in India to the United States in April and May 2025 amounted to 25.52 billion dollars, compared to $ 20.89 billion in the same last financial period.