Indian Exporters Postpone Shipments Amid US Tariff Uncertainty

Global Trade Unrest: U.S. Tariffs Cast Uncertainty on Leading Export Sectors

Key Developments:

• A U.S. court struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA), raising questions about the legality of trade arrangements negotiated under the measure.
• President Donald Trump invoked Section 122 of the Trade Act of 1974 to levy a global tariff, initially proposed at 10% and later raised to 15%.

Impact on Export Sectors:

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• Textiles, Gems and Jewellery, and Seafood exporters are adopting a wait and watch strategy due to uncertainty surrounding trade rules and duty structures.
• Shrimp exporters have held back shipments as requested by buyers, with orders slowing down due to the unclear tariff situation.
• Gems and Jewellery exporters have decided to pause consignments for at least a week to assess the evolving trade situation and await clearer policy direction.
• Textile exporters are adopting a cautious stance, as the latest rates have wiped off any competitive edge enjoyed with the recently concluded trade deal with the U.S.

Market Data:

• Shrimp exports from India to the U.S. valued at $2.4 billion out of total agri-exports of $5.9 billion in FY25.
• Gems and Jewellery exports valued at nearly $10 billion.

Industry Insights:

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• Rahul Mehta, Chief Mentor, Clothing Manufacturers Association of India (CMAI), stated that businesses can survive tough conditions but find it difficult to survive in uncertain conditions.
• Sabyasachi Ray, Executive Director, Gem & Jewellery Export Promotion Council (GJEPC), noted that gems and jewellery players will benefit if the rates stand where they are, but exporters are holding shipments to understand the evolving trade situation.
• Gunturu Pawan Kumar, Managing Director of Sprint Exports Pvt. Ltd. and National President of the Seafood Exporters Association of India (SEAI), is eagerly waiting for updates on the Customs and Border Protection (CBP) website.