Testing Times For Export Engines

The ability to pass on costs, diversify markets, and optimise operations will determine which sectors emerge stronger from this tariff storm

- By ADITI NAYAR

The trade winds between India and the US remain in flux, with the imposition of 50 per cent tariff. The US accounts for more than 5 per cent share in India's exports across as many as 140 product categories. Here's how some major sectors will be affected.

In textiles and apparel, where the US accounts for a third of Indian exports, the US can easily switch between suppliers. The sector withstood the first 25 per cent tariff, thanks to advance orders. But with the additional 25 per cent tariff, exporters expect a 6-9 per cent dip in revenues and margin contraction of 200-300 basis points (bps) in FY26. Entities with manufacturing bases in countries like Bangladesh and Vietnam are better positioned, but shrinking US market share and increased competition from lower-tariff nations can hit the rest hard.