On Wednesday, August 27, the Donald Trump administration in the US announced an additional 25% tariff on Indian exports. With this, the total tax imposed on Indian exports to the US becomes 50%.
Once these tariffs took effect, many officials at the White House commented on their future. One of them, Scott Bessent (Treasury Secretary), mentioned the two countries' relations, saying that the current relationship between India and the US is a little complicated. Still, he also hoped that both nations would eventually harmonize.
The Economic Advisor of the White House, Kevin Hassett, remarked that there will be ups and downs during the trade negotiations between the nations. If India does not go back on its stance, the US president will not move back either. He also spoke about the Indian "self-will" about opening up their markets to US products. The worst hit Indian sectors include Textiles, Seafood, Gems and Jewellery as they have a big exposure to the US market.
According to the official information, in 2024, the US market accounted for nearly 15% of all Indian textile exports with a total value of over $ 118 billion. The stocks, including Gokaldas Exports, Indo Count Industries, Pearl Global, KPR Mill, Arvind, Welspun Living, among other stocks, are likely to react to this due to the overall topline of 25% to 70% of these companies from the US market.
Also Read: India Faces Trade Crisis as Trump Imposes 50% Tariff
On Wednesday, Pallab Banerjee of Pearl Global stated that US companies are demanding a discount of 15% to 20% to neutralize the effect of these tariffs, or they will shift production to other nations. Additionally, he said that half of their garment business depends on the US market and high taxes could force a shift of up to $6 billion in exports and endanger lakhs of jobs.
The other part that has a significant exposure to the US market is Shrimp Feed Stocks. The stocks, involving Avanti Feeds, Apex Frozen Foods and Waterbase, get up to 50% to 60% of their topline from the US market. The chemical stocks, including SRF, Navin Fluorine and Galaxy Surfactants, among other stocks, should also be careful with their exposure to the US market.
As per its annual report, the US contributed 12% to the overall revenue of SRF in the financial year 2024, while 65% of Navin Fluorine's overall revenue comes from the export market. While shares of these textile stocks are trading with losses between 1.5% and 5%, with some recovering from the day's lows, stocks of seafood exporters like Avanti Feeds, Apex Frozen Foods, and Waterbase have declined by up to 6%.
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