US tariffs will hit 66 per cent of India’s exports worth $86.5 billion, with textiles, carpets, handicraft, leather and the gems sectors are at risk, according to think tank Global Trade Research Initiative (GTRI).

Indian goods worth $60.2 billion started facing 50 per cent US duties from August 27. Thirty per cent of US-bound exports remain duty-free. Pharmaceuticals, active pharmaceutical ingredients (APIs), electronics lead $27.6 billion worth duty-free exports.

India’s competitors are poised to gain and will replace India in key sectors. The country’s gross domestic product (GDP) growth could drop from 6.5 per cent to 5.6 per cent, but 20 per cent export-to-GDP ratio provides cushion, the report noted.

US tariffs will hit 66 per cent of India’s exports worth $86.5 billion, with textile-apparel, carpets, handicraft, leather and the gems sectors are at risk, according to think tank Global Trade Research Initiative.
Labour-intensive sectors are bracing for 70 per cent export collapse.
Textile hubs like Tiruppur, Noida-Gurugram, Ludhiana, Jaipur and Bengaluru will be under pressure.

The most severely affected sectors are those where the United States accounts for over 30 per cent of India’s global exports, predominantly labour-intensive industries, which now face 70-80 per cent expected declines in annual exports.

Sectors with less than 20-per cent share in exports to the United States, though relatively insulated, still face 50-70-per cent potential declines due to their integration in global value chains. These include organic chemicals.

Textiles and apparel

India’s textiles and apparel sector, whose annual exports to the United States are worth $10.8 billion with 35 per cent of the share of total exports to that country, will see 63.9 per cent tariffs. Tiruppur, Noida-Gurugram, Ludhiana, Jaipur and Bengaluru will be under pressure. Bangladesh, Vietnam, Mexico, and CAFTA-DR countries are expected to replace Indian suppliers, GTRI report said.

With margins in the single digits, the new tariff effectively shuts Indian apparel out of its largest market. Tiruppur exporters are rushing shipments while cancelling new styles, while Noida-Gurugram players have frozen planned capacity expansions and is considering downsizing.

Ludhiana reports a slump in yarn and fabric demand, with working capital under stress; and Bengaluru units are preparing for shift cuts as buyers push for offshore production. Industry estimates warn of hundreds of thousands of jobs at risk across these hubs if US demand collapses.

Exporters have front-loaded shipments ahead of the deadline, but consider the government’s temporary 11-per cent cotton duty waiver (August 19-September 30) insufficient to offset the loss. A few firms are shifting US-bound programmes to Bangladesh, Indonesia, Vietnam and Guatemala, while others may start using factories in Ethiopia and Kenya (around 10-per cent tariff). Industry bodies are seeking emergency credit and tax relief.

Carpets

The carpets sector, with $1.2 billion worth annual exports to the United States and 58.6 per cent share, faces collapse, it noted. Livelihoods in Bhadohi, Mirzapur and Srinagar will be jeopardised, while Turkey, Pakistan, Nepal and China gaining.

Bhadohi-Mirzapur exporters report containers ready but orders cancelled or delayed, while Kashmir’s hand-knotting community faces potential mass unemployment as orders dry up. Moradabad, linked through metalware and accessories, is also seeing a slowdown.

Larger firms are exploring new markets in the Middle East and Europe, product diversification into synthetic rugs, and offshore machine-made production in Turkey or Egypt to maintain US access. However, for traditional hand-knotted producers, relocation is not an option due to the highly specialised and localised nature of their craft.

Handicrafts

Handicrafts ($1.6 billion; 40-per cent share) and furniture and bedding ($1.1 billion; 44.8-per cent share) risk factory closures across Jodhpur, Jaipur, Moradabad and Saharanpur, with Vietnam, China, Turkey, and Mexico filling the gap.

The effect is widespread across India’s craft hubs. Rajasthan faces severe disruption, with many workshops preparing for closures. Uttar Pradesh has seen orders paused and production cuts in brassware and wood-carving units. The tariff threatens not only incomes but also the survival of centuries-old craft traditions.

Leather and footwear

Leather and footwear ($1.2 billion; 20-per cent share) will lose ground to Vietnam, China, Indonesia and Mexico, threatening Agra, Kanpur and Tamil Nadu’s Ambur-Ranipet clusters, the GTRI report observed.

Industry bodies are pushing for diversification into the EU, the United Kingdom and Gulf markets and exploring ‘Made in Europe’ partnerships to retain competitiveness in the US market.

Furniture and Bedding

India’s exports to the United States of this sector was $1.1 billion in FY25, with the latter having 44.8-per cent share in India’s exports. Tariffs rise from 2.3 per cent to 52.3 per cent, affecting manufacturing hubs in Jodhpur and Moradabad.

Mattresses, already under US anti-dumping duties since 2024, will now face a prohibitive cost barrier, effectively pricing Indian products out of the American market, the GTRI report said.

Jodhpur and Saharanpur workshops report packed containers with buyers withdrawing orders, forcing overtime cuts and layoffs. The Delhi-National Capital Region upholstery belt is holding finished goods in warehouses as US buyers re-price contracts, while protests in Jaipur’s handicraft districts highlight fears of widespread job losses.

Thousands of livelihoods linked to timber, textiles, and artisanal supply chains risk collapse if US demand vanishes, according to the report.

For bedding and home textiles, Pakistan, China, Turkey and Vietnam are poised to replace Indian suppliers, while Vietnam, Indonesia, Mexico, and China will dominate mattresses and boxed foam products, it noted.

Organic Chemicals

Organic chemicals ($2.7 billion; 13.2-per cent share) will see tariffs jump from 4 per cent to 54 per cent, crippling chemical hubs in Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh and yielding ground to EU, China, Mexico and South Korea.

Fibre2Fashion News Desk (DS)

US real gross domestic product (GDP) increased at an annual rate of 3.3 per cent in the second quarter (Q2) this year, according to the second estimate released by the Bureau of Economic Analysis (BEA).

In Q1, it decreased by 0.5 per cent year on year (YoY).

The Q2 2025 rise primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP, and an increase in consumer spending. These movements were partly offset by decreases in investment and exports.

US real GDP rose at an annual rate of 3.3 per cent in Q2 2025, according to the second estimate by the Bureau of Economic Analysis.
In Q1, it fell by 0.5 per cent YoY.
The price index for gross domestic purchases increased by 1.8 per cent YoY in Q2 2025, revised down by 0.1 pp from the previous estimate.
Real gross domestic income rose by 4.8 per cent YoY in Q2 compared with a rise of 0.2 per cent in Q1.

Real GDP was revised up 0.3 percentage point (pp) from the advance estimate, primarily reflecting upward revisions to investment and consumer spending that were partly offset by a downward revision to government spending and an upward revision to imports.

Compared to Q1, the upturn in real GDP in Q2 primarily reflected a downturn in imports and an acceleration in consumer spending that were partly offset by a downturn in investment.

Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment increased by 1.9 per cent in Q2 2025, revised up by 0.7 pp from the previous estimate, a BEA release said.

The price index for gross domestic purchases increased by 1.8 per cent YoY in Q2 2025, revised down by 0.1 pp from the previous estimate.

The personal consumption expenditures (PCE) price index increased by 2 per cent YoY, revised down by 0.1 pp from the previous estimate. Excluding food and energy prices, the PCE price index increased by 2.5 per cent, the same as previously estimated.

Real gross domestic income (GDI) increased by 4.8 per cent YoY in Q2 2025 compared with an increase of 0.2 per cent in Q1. The average of real GDP and real GDI increased by 4 per cent in contrast to a decrease of 0.1 per cent in Q1.

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased by $65.5 billion in Q2 in contrast to a decrease of $90.6 billion in Q1 2025.

Fibre2Fashion News Desk (DS)

The growth rate of India’s index of industrial production (IIP) for July this year was 3.5 per cent, according to the Ministry of Statistics and Programme Implementation. It was 1.5 per cent in June, as per a quick estimate.

The IIP growth rate of the manufacturing sector in July was 5.4 per cent.

The quick estimates of the country’s IIP stood at 155 in July against 149.8 in July 2024. The IIP for manufacturing for the month was 156.9.

The growth rate of India’s index of industrial production (IIP) for July was 3.5 per cent, the Ministry of Statistics and Programme implementation said.
It was 1.5 per cent in June, as per a quick estimate.
The IIP growth rate of the manufacturing sector in July was 5.4 per cent.
Within manufacturing, 14 out of 23 industry groups recorded a positive growth in July 2025 over the same month last year.

Within manufacturing, 14 out of 23 industry groups at national industrial classification (NIC) 2 digit-level have recorded a positive growth in July 2025 over July 2024, a release from the ministry said.

The indices stood at 147.6 for primary goods, 119.7 for capital goods, 174.1 for intermediate goods and 201 for infrastructure/construction goods in July.

The indices for consumer durables and consumer non-durables stood at 136.3 and 147.8 respectively in the month.

Fibre2Fashion News Desk (DS)