A major trade shock has hit Indian exporters as leading U.S. retailers — including Amazon, Walmart, Target, and Gap — have halted orders from India following President Donald Trump’s decision to Doubles Tariff on Indian goods. The move, announced earlier this week, has led to immediate disruptions in apparel and textile shipments, raising fears of a multi-billion-dollar hit to India’s export economy.
According to industry sources, exporters across India have received official letters and emails from U.S. buyers instructing them to pause shipments until further notice. The halt comes as American buyers refuse to bear the additional costs caused by the new 50% tariff, instead asking Indian suppliers to absorb the losses themselves.
50% Tariff and the Impact on Indian Exports
The Doubles Tariff measure includes an initial 25% hike that took effect on Thursday, with another 25% scheduled to be implemented on August 28. The White House stated that the tariff increase was a penalty for India’s continued import of Russian oil.
Exporters say that the cost of doing business with the U.S. could rise by 30% to 35%, and order volumes could fall by as much as 40% to 50%. Analysts estimate the potential loss for Indian exporters at around $4-5 billion in the coming months.
Major players in India’s textile sector — including Welspun Living, Gokaldas Exports, Indo Count, and Trident — make between 40% and 70% of their sales in the U.S. With the Doubles Tariff now in place, these companies are bracing for severe disruptions.
Losing Ground to Bangladesh and Vietnam
The latest Doubles Tariff decision could redirect U.S. orders to countries such as Bangladesh and Vietnam, which currently face only a 20% tariff. Exporters fear that once U.S. buyers switch to these countries, it may be difficult for India to regain its market share.
The U.S. is India’s largest market for apparel and textiles, accounting for 28% of the sector’s total exports worth $36.61 billion in the fiscal year ending March 2025.
Trump’s Justification for the Doubles Tariff
In an executive order, President Donald Trump said it was “necessary and appropriate” to impose the additional duty on India due to its purchase of Russian oil, which he claims indirectly supports Moscow’s economy amid the ongoing Ukraine conflict.
India has rejected this reasoning, calling the move “unfair, unjustified, and unreasonable.” The Ministry of External Affairs (MEA) stated that India’s oil imports are guided by market conditions and aimed at ensuring the energy security of its 1.4 billion citizens.
“It is extremely unfortunate that the U.S. has chosen to impose additional tariffs on India for actions that many other nations are also taking in their own national interest,” the MEA said in a strongly worded statement.
India’s Defence and Global Context
India pointed out that it began importing more oil from Russia after traditional suppliers diverted shipments to Europe following the outbreak of the Ukraine conflict in 2022. At that time, the U.S. had actively encouraged such imports to stabilize global energy markets.
The MEA also highlighted that several countries, including the U.S. and European Union members, continue to trade extensively with Russia in areas such as uranium, palladium, fertilizers, and chemicals. The EU’s bilateral trade in goods with Moscow reached €67.5 billion in 2024, far exceeding India’s trade volume with Russia.
“In this background, the targeting of India is unjustified,” the statement read. “Like any major economy, India will take all necessary measures to safeguard its national interests and economic security.”
Industry Braces for Long-Term Effects
Trade experts warn that the Doubles Tariff could have a cascading effect on India’s manufacturing sector, employment, and overall GDP growth. Small and medium-sized exporters are particularly vulnerable, as they have fewer resources to absorb such steep cost increases.
While some exporters are considering diversifying into markets such as Europe, the Middle East, and Africa, these regions cannot immediately replace the scale of U.S. demand.
For now, the focus is on negotiations between trade bodies, exporters, and the government to find ways to offset the blow. If the Doubles Tariff remains in place for an extended period, it could fundamentally reshape India’s export landscape.
