Major U.S. retailers—including Amazon, Walmart, Target, and Gap—have halted orders from Indian apparel and textile exporters in response to a sudden doubling of U.S. import tariffs to 50%. This abrupt move has created widespread disruption across India’s garment and textile sector.
What Triggered the Retail Pause?
- On August 6–7, 2025, U.S. President Donald Trump signed an executive order imposing a 25% immediate tariff, with another 25% effective from August 28—a punitive measure tied to India’s import of Russian oil.
- This blitz tariff created a “harrowing night” for exporters, who received frantic messages and calls from American buyers suspending shipments or cancelling orders with no clarity on costs.
Scope and Industry Impact
- U.S. is India’s largest apparel export market, accounting for 28% of textiles and apparel exports amounting to $36.6 billion in 2024–25.
- Retailers explicitly asked exporters to absorb the tariff costs, rather than sharing the burden—triggering immediate operational and financial instability.
- The tariff hike is estimated to inflate costs by 30–35%, potentially prompting a 40–50% drop in U.S.-bound orders, risking $4–5 billion in export revenue for India’s textile sector.
Key Export Hubs Under Pressure
- Tiruppur, Noida, Surat, and other textile regions are especially vulnerable, with firms such as Welspun Living, Gokaldas Exports, Indo Count, Trident, Pearl Global, RichaCo, Titan, and Raymond facing halted orders, production delays, and urgent logistical decisions.
- Companies like Pearl Global reported demands from U.S. clients to either bear tariff costs or relocate production to countries like Bangladesh, Vietnam, or Guatemala
- Exporters are now rushing shipments to beat the second tariff tranche or exploring alternative production bases. Reuters
Outlook and Policy Implications
- This tariff shock depresses India’s “Make in India” momentum and could lead to long-term shifts in global supply chains as buyers pivot to lower-cost destinations like Bangladesh and Vietnam.
- Exporters are looking toward Indian government interventions, trade negotiations, and supply diversification to weather this crisis.
