New Delhi: The Federation of Indian Export Organisations (FIEO) expressed significant concerns on Tuesday regarding the high tariffs imposed by the US on Indian goods. Textiles and apparel manufacturers in Tirupur, Noida, and Surat have ceased production due to declining cost competitiveness resulting from these elevated duties. As of August 27, US tariffs on Indian exports will rise to 50 percent, which will critically hinder the export of Indian goods to its largest market.
FIEO President SC Ralhan termed this situation a setback, highlighting that approximately 55 percent of India’s shipments to the US, valued at $47-48 billion, are now facing a pricing disadvantage of 30-35 percent, making them less competitive compared to products from China, Vietnam, Cambodia, the Philippines, and other Southeast and South Asian nations. Ralhan voiced serious concerns regarding the US government’s additional 25 percent tariff on Indian-origin goods, which raises total duties on numerous export categories to as high as 50 percent, effective from August 27, 2025. The ongoing challenges are causing textiles and apparel producers in Tirupur, Noida, and Surat to halt their operations amidst increasing cost pressures.
This sector is losing market share to more affordable competitors from Vietnam and Bangladesh. Labour-intensive export industries such as leather, shrimp, ceramics, chemicals, handicrafts, and carpets are expected to experience a significant decline in competitiveness, particularly against European, Southeast Asian, and Mexican manufacturers. Ralhan stressed that delays, order cancellations, and lost cost advantages pose substantial risks for these sectors. He called for immediate government intervention, including interest subvention schemes and export credit support to maintain working capital and liquidity. The sector demands lower credit costs and easier access to financing, particularly for MSMEs, with backing from banks and financial institutions.
He also requested a moratorium on loan repayments for up to a year, alongside the expansion of Production-Linked Incentive (PLI) schemes, enhanced infrastructure, and investments in cold-chain and storage facilities to boost competitiveness and facilitate market diversification through Free Trade Agreements (FTAs).
