BURDEN OF TRUMP TARIFFS

EXPORTS WORTH ₹4.2 LAKH CRORE TO THE U.S. AND COUNTLESS JOBS ARE IN PERIL. THE CHALLENGES AND OPPORTUNITIES IN ENTERING NEW MARKETS

- M.G. ARUN Illustration by NILANJAN DAS

For 58-year-old Asad K. Iraqi, CEO of Kanpur-based footwear company AKI India Limited, Donald Trump's whims are upending a business he spent three decades building. From Kanpur's crowded lanes, he expanded AKI into a public listed company, with a registered office in Jajmau, and a tannery and footwear manufacturing unit in Akrampur, Unnao, employing 300 people in all. It sold footwear and leather goods under the brand Maplewood in India and Tresbon in the UK, while also producing for European labels like Solovair, a British heritage name.

AKI's turnover touched Rs 75 crore in FY24. Exports to the US constituted 10 per cent of its total. In FY25, Iraqi had shipments worth nearly Rs 7.5 crore lined up for the American market. Now, finished goods lie waiting, undelivered, after US buyers backed out of their commitments. With no fresh orders coming in, Iraqi anticipates a 20 per cent decline in business this year.

Like Iraqi, thousands of Indian exporters with high stakes in the US are bracing for the worst. On August 27, the additional 25 per cent cess levied by the US administration on Indian goods as penalty for India's continued purchase of Russian oil kicked in. This was over and above the 25 per cent reciprocal tariffs that had come into effect 20 days earlier, as part of Trump's attempt to level the $41.2 billion (Rs 3.6 lakh crore) trade surplus in India's favour. The figures compiled by the Geneva headquartered International Trade Centre pegs it higher, at $49.5 billion (Rs 4.3 lakh crore) for 2024 (see A Global Comparison). According to India's commerce ministry, the country's exports to the US stood at $86.5 billion (Rs 7.6 lakh crore) in FY25, while it imported goods worth $45.3 billion (around Rs 4 lakh crore).