US Tariffs: The $48 billion question... What are India's options to avoid US tariffs?

India exports pharma products, gems and jewellery, electronics and electrical, textiles and apparel, petroleum products, engineering, basmati rice, handicrafts, home decor, leather, footwear and seafood to the US.

 

India is working on a multi-pronged strategy to avoid the loss of heavy tariffs on its $ 48.2 billion trade with the US . Proposals such as the Export Promotion Mission and Special Economic Zone ( SEZ) amendments are being considered. Labor intensive sectors are expected to be affected the most as sectors such as textiles, shrimp, leather , and gems and jewellery will be most affected by Trump 's decision.

Exporters said textile and apparel producers in Tiruppur , Noida and Surat have halted production as they say they are lagging behind low-cost producers in Vietnam and Bangladesh. Similarly, Trump 's tariffs may have a strong impact on the seafood market, especially shrimp stocks . The new tariffs may increase the risk of disruption in the seafood supply chain and problems for farmers. 40 percent of India's seafood goes to US markets. Exporters want a moratorium on payment of principal and interest for loans for one year.

According to the Economics Times report, experts have expressed concern that India's exports to the US may see a huge decline in the financial year 2026. In the financial year 2025, India exported $ 86.5 billion to the US, which may fall to $ 49.9 billion next year . 

What are the options for India to avoid the impact of US tariffs?

High-level meetings are being held in the government. An official said that the government is considering proposals like Export Promotion Mission and Special Economic Zone Amendment. In such circumstances, India should increase its focus on the European Union, Eurasian Economic Union, United Kingdom, Gulf countries and East Asia. We are already present in these markets, but now we should consider expanding it.

At such a time, India can also take advantage of good relations with Russia. Russia has said that its market is open for Indian goods, so India should move forward on this so that alternative trade arrangements can be made. Another option is that India can promote other domestic industries including textile, IT, which are affected by American tariffs, by giving subsidy to domestic industries.

 

What does India sell to America?

India exports medicines and pharma products, gems and jewellery, electronics and electricals , textiles and apparel, petroleum products, engineering, basmati rice, handicrafts, home decor , leather, footwear and seafood to America . The tariff imposed by America on Indian goods will have the biggest impact on 70 percent of exports , which includes goods like textiles, shrimp, leather , and gems and jewellery, while 30 percent of products like electronics , medicines and pharmaceuticals are duty free .

 

Of the 50 percent tariff imposed by the US on India , 25 percent is in retaliation for the tariff imposed by India and 25 percent is a penalty for buying oil from Russia . The 25 percent additional tariff was imposed on August 7 and the remaining 25 percent tariff imposed as a penalty was implemented on August 27.