India is preparing to launch an aggressive counter-strategy in response to the steep 50 per cent tariff hike imposed by the United States on its textile exports—a move widely seen in New Delhi as vindictive and disproportionately targeting India.
The tariffs, which came into effect on August 27, are the result of U.S. President Donald Trump’s retaliatory trade policies, punishing India for continuing oil purchases from Russia despite the ongoing Ukraine conflict.
India, however, has firmly rejected Washington’s stance, arguing that energy imports are driven by national security needs and market realities for its 1.4 billion citizens, and not by geopolitics.
While Trump has singled out India for the steepest tariffs—raising duties from 25 per cent to 50 per cent in just four months—other major Russian oil importers, including China and Turkey, have faced far lower penalties of 30 per cent and 15 per cent, respectively.
This stark disparity has fuelled perceptions that Trump’s trade policy is less about Ukraine and more about exerting pressure on India’s growing global influence.
India’s Counteroffensive: A Global Outreach Plan
To counter this shock tariff hike—which threatens $48 billion worth of Indian exports to the US—the Indian government is preparing a high-intensity diplomatic and trade outreach across 40 countries.
These nations include key markets such as Australia, Belgium, Canada, France, Germany, Italy, Japan, Mexico, Poland, Russia, Spain, South Korea, Turkiye, the Netherlands, the UAE, and the UK.
The strategy, officials told PTI, will “position India as a trusted and sustainable supplier of quality textile and apparel products,” while also targeting diversification to reduce overdependence on the US market, which currently absorbs about 20 per cent of India’s total exports.
With $590 billion in combined textile and apparel imports, these 40 countries present massive growth opportunities for Indian exporters, who currently hold just a 5-6 per cent global market share.
Export Promotion Councils to Lead the Charge
India’s Export Promotion Councils (EPCs) will form the backbone of this strategy, tasked with:
- Conducting market mapping and identifying high-demand segments.
- Linking specialised production hubs like Surat (textiles), Panipat (home furnishings), Tirupur (knitwear), and Bhadohi (carpets) with international buyers.
- Leading Indian participation in global trade fairs and exhibitions under a unified Brand India campaign.
- Guiding exporters on leveraging Free Trade Agreements (FTAs), achieving sustainability certifications, and meeting international compliance standards.
Commerce Ministry officials are also finalising the Export Promotion Mission, announced in the Union Budget 2025-26, with stakeholder consultations slated over the next few days.
The goal is to insulate key export sectors from Trump’s punitive measures while identifying new, high-potential markets.
Textile Sector Hit Hardest, Other Industries Also Suffer
The Indian textile and apparel sector, valued at $179 billion (with $142 billion in domestic consumption and $37 billion in exports), is one of the hardest-hit industries, alongside gems and jewellery, shrimp, leather, chemicals, and machinery.
The Apparel Export Promotion Council (AEPC) revealed that Indian apparel exports, worth $10.3 billion, now face an unprecedented 30-31 per cent tariff disadvantage against competitors like Bangladesh, Vietnam, Sri Lanka, Cambodia, and Indonesia.
This, exporters warn, could effectively push India out of the US apparel market altogether.
India’s status as the sixth-largest textile exporter, trading with over 220 countries, underscores the severity of Trump’s measures.
Despite its wide trade network, the US remains India’s single largest export destination, with bilateral trade in goods reaching $131.8 billion in FY25.
India Slams US Tariffs as ‘Unjustified’
New Delhi has repeatedly condemned Trump’s decision, describing it as “unjustified, unreasonable, and deeply unfair.”
External Affairs Minister S. Jaishankar, speaking after his Moscow visit, expressed India’s “perplexity” at the US stance, emphasising that energy purchases are made on commercial terms and are essential for India’s economic security.
Echoing this sentiment, Indian envoy to Russia Vinay Kumar argued that trade cannot be politicised, saying:
If the US has a problem buying refined oil or products from India, then don’t buy it. Nobody forces you to. Europe buys, America buys—so if you don’t like it, don’t buy it.”
Indian officials and exporters alike view Trump’s escalating tariffs as a political move aimed at penalising India’s independent foreign policy choices.
The sharp rise in tariffs also comes at a time when global trade competition is intensifying, putting additional pressure on India’s export-driven industries.
A Test of Resilience
India’s response—a sweeping international outreach plan, FTA-driven negotiations, and diversification strategy—is a clear signal that it will not be coerced by punitive economic measures.
While Trump’s tariffs are meant to send a message, India is betting on its global partnerships, supply chain reliability, and growing influence in emerging markets to weather this storm and potentially even turn it into an opportunity for expansion.
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