The United States’ decision to levy 50% tariffs on Indian imports came into effect on August 27, creating significant concerns for both the Indian economy and government. Several industries — many of them labour-intensive and heavily dependent on the U.S. as a key export market — are already witnessing a slowdown in demand. Recognising this, the government is working on short-term support measures for affected sectors.

The severity of the tariff impact can be assessed by considering three factors together:

1. The absolute value of exports to the U.S.,

2. The share of the U.S. in a sector’s total global exports, and

3. The final tariff rate applicable.

If all three indicators are high, the sector faces greater stress; conversely, if the U.S. market accounts for only a small share of total exports, the disruption is limited.

Sectors facing heavy impact

• Shrimp: India exported shrimp worth $2.4 billion to the U.S. in 2024–25, which was 32.4% of its global exports. Earlier, Indian shrimp faced a 10% tariff, but with the new hike, the effective rate stands at 60%. Shrimp prices in Andhra Pradesh, the main producing state, have already fallen by 20% after the earlier August 7 tariff of 25%, and are expected to decline further.

• Gems and Jewellery: Exports of diamonds, gold, and jewellery to the U.S. were $10 billion (40% of sectoral exports). Tariffs have jumped from 2.1% to 52.1%, leading to production cuts in hubs like Surat, where the diamond-polishing industry employs about 1.2 million workers.

• Textiles and Apparel: Valued at $10.8 billion, with apparel alone at $5.4 billion, India’s textile exports to the U.S. are highly vulnerable since the U.S. accounts for 35% of India’s apparel exports. Tariffs have soared from 13.9% to 63.9%. Reports suggest exporters in Tiruppur, Noida-Gurugram, Ludhiana, and Bengaluru are facing severe strain — from shipment rushes and frozen expansions to job cuts.

• Carpets: With $1.2 billion exports to the U.S. (58.6% of global carpet exports), tariffs have risen from 2.9% to 52.9%, hitting weavers and artisans hard.

• Other affected industries include