Indian textiles, jewellery and auto components at risk of 50% Trump tariffs

US President Donald Trump's steep 50% tariffs on Indian imports could severely undermine India's manufacturing ambitions and slow economic growth, Moody's Ratings said on Friday (August 8).

AI Brief

Starting late August, US tariffs on some Indian goods will reach 50%, among the highest for any trading partner.
India's gems, jewellery, and textile industries face severe disruption, with billions in exports and orders at risk.
Auto component exports for commercial vehicles will be hit hardest, while parts for small vehicles face lower tariffs.

Trump on Wednesday (August 6) imposed an additional 25% tariff on Indian goods, citing New Delhi's continued imports of Russian oil in a move that could severely impact India's gems and jewellery, textiles, and auto components sectors.

The new import tax, effective 21 days after August 7, will raise duties on some Indian goods to as high as 50% - among the highest levied on any U.S. trading partner.

GEMS & JEWELLERY

The United States, India's largest market for gems and jewellery, accounted for $10 billion in exports last year, nearly 30% of India's global sales in the sector.

India's Gem & Jewellery Export Promotion Council has warned that the tariffs could bring the industry to a standstill, especially with competing manufacturing hubs such as Turkey, Vietnam and Thailand being taxed at lower rates.

TEXTILES

India's textile industry is already receiving panic-stricken calls from customers after Trump announced the additional 25% tariff.

Apparel and textile companies like Shahi Exports, Welspun, Indo Count Industries, Trident and Gokaldas Exports are top exporters that are likely to take a hit with tariffs rising to 50%.

In 2024, the companies exported goods worth over US$2 billion and in the first half of 2025 shipped products of about US$1 billion to U.S. clients including Walmart, Target, Costco and Gap.

AUTO COMPONENTS

India's auto components sector has grown rapidly over the last few years and is one of the few industries that records a trade surplus. The U.S. is its largest export market, making up close to a third of global trade.

In 2024, India exported components worth US$6.6 billion to the U.S. Of this, over US$3.5 billion comprised parts for cars and small trucks that are currently exempt from the 50% tariff and will pay just 25%.

However, exports of components for commercial vehicles like large trucks and agriculture equipment, worth about $3 billion, will attract a 50% tariff.