India's Exporters Face U.S. Tariff Storm as Global Prices Surge
Indian exporters, particularly in textiles, leather, gems, chemicals, and seafood, are grappling with canceled U.S. orders and potential job losses due to escalating tariffs. Meanwhile, the U.S. and China have extended their tariff truce, and U.S. core inflation has surpassed 3 percent, putting pressure on the Federal Reserve.
The Indian government has launched a four-pronged strategy to tackle the tariff impact. It aims to fast-track free trade agreements, improve ease of doing business, enhance export competitiveness, and diversify markets and import sources. However, India is facing a sharp increase in duties, with a total of 50 percent tariff imposed on August 27.
Prime Minister Narendra Modi has criticized the tariffs as 'unfair and unreasonable', doubling down on a self-reliance agenda. In the U.S., consumers are feeling the pinch, with prices of goods like furniture, toys, and imported foods rising due to tariffs. The global impact is widespread, affecting consumers, manufacturers, and trade-dependent economies. In June, the U.S. collected $28 billion in tariffs, with a growing portion passed directly to consumers.
The ability to adapt to tariff policy changes and make informed decisions about pricing, sourcing, and compliance will be crucial for businesses navigating the fragmented global trading system. Meanwhile, governments and central banks are grappling with the economic fallout, with inflation and consumer prices rising in response to tariffs.
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