Tariff Threat
FIEO seeks immediate govt support as US tariffs on India set to rise to 50%
This story was originally published at 16:02 IST on 26 August 2025
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NEW DELHI - The Federation of Indian Export Organisations has sought immediate support from the government, with US tariffs on imports from India set to rise to 50% from Wednesday. The export body has urged the government to bring in interest subvention schemes and export credit support to sustain working capital and liquidity. It has also sought low cost of credit and easy availability of credit, especially for micro, small, and medium enterprises.
While the US imposed a 25% tariff on imports of Indian goods earlier this month, the duty is set to rise to 50% from Wednesday. "The move will severely disrupt the flow of Indian goods to its largest export market," the export body said.
The additional tariff will impact nearly 55% of exports to the US worth almost $50 billion. In 2024-25 (Apr-Mar), India exported $86.51 billion worth of goods to the US and had a trade surplus of $40.82 billion.
The additional tariffs expose Indian exporters to pricing disadvantages of 30–35%, "rendering them uncompetitive in comparison to its competitors from China, Vietnam, Cambodia, Philippines and other Southeast and South Asian countries", the export body said.
The export body said that textiles and apparel manufacturers in Tirupur, Noida, and Surat have already halted production amid worsening cost competitiveness. "This sector is losing ground to lowercost rivals from Vietnam and Bangladesh. While for the seafood especially shrimps, as the US market absorbs nearly 40% of Indian seafood exports and the tariff increase risks stockpile losses, disrupted supply chains, and farmer distress."
The federation also urged for moratorium on payment of principal and interest for loans up to a period of 1 year. "Additionally, automatic enhancement of the existing limit by 30% along with collateral-free lending on Emergency Credit Line Guarantee Scheme lines may also be pushed as these will help in addressing the stress of these companies without much burden on the exchequer," the export body said. End
US$1 = INR 87.68
Reported by Shubham Rana
Edited by Vandana Hingorani
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