US Tariffs Hit Indian Exports: PL Capital Flags Risks for Textiles, Gems, Chemicals
- 29th August 2025
- 11:30:00 AM
- 3 min read
Summary
Fresh US tariffs on Indian exports may shave up to 50 bps from GDP, according to PL Capital’s India Strategy Report (August 2025). Sectors such as textiles, gems & jewellery, marine products, and chemicals face the sharpest pressure, though India’s domestic demand cycle continues to provide resilience.
Mumbai | August 29 – Fresh US tariffs on Indian exports could shave off nearly 50 basis points from India’s GDP growth, according to PL Capital’s India Strategy Report (August 2025). The brokerage highlighted that textiles, gems & jewellery, marine products, specialty chemicals, and IT services are the most vulnerable sectors to the latest trade measures.
The US administration’s move, aimed at protecting local manufacturers, is expected to dent the competitiveness of Indian exporters in a key global market. Price-sensitive categories such as garments, processed seafood, and jewellery are likely to be hit first, with downstream effects on margins and jobs.
“US tariffs on Indian goods come at a time when global trade is already slowing. Export-linked industries such as textiles, gems, and marine products face pricing pressure, while IT and chemicals may see deferred orders. However, India’s structural reliance on domestic demand provides a cushion,” said Amnish Aggarwal, Head of Research, PL Capital.
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Textiles and Gems Face the Sharpest Blow
The textile sector, which relies heavily on US demand for garments and fabric, is expected to lose price competitiveness against low-cost peers. The gems and jewellery industry, a $30 billion export engine, could also see softer orders as US import duties alter consumer spending patterns in the luxury segment.
Marine and Chemicals Under Pressure
Marine products, another top export category for India, face higher landed costs in the US, which may dent orders in FY26. Meanwhile, specialty chemicals, one of India’s fastest-growing export sectors, could see pressure on margins as global customers adjust supply chains and pricing under the new tariff regime.
IT services, while not directly tariffed, may also feel the pinch if US corporates slow down discretionary technology projects amid heightened trade uncertainty.
Domestic Demand as a Buffer
Despite tariff risks, PL Capital believes India remains relatively insulated compared to other emerging markets. Domestic demand accounts for nearly two-thirds of India’s GDP, with banking, infrastructure, FMCG, and healthcare continuing to post strong momentum. Reforms such as GST 2.0 and government-led capex are expected to sustain earnings visibility even as exports soften.
“India’s growth model is less export-reliant. Domestic consumption strength and policy stability ensure that the economy can absorb short-term global shocks,” the India Strategy Report said.
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Bottom Line
While US tariffs on Indian exports create fresh challenges for sectors like textiles, gems & jewellery, marine products, and chemicals, PL Capital’s India Strategy Report underlines that the broader market outlook remains intact. With domestic demand and policy reforms driving growth, India’s equity story continues to stand out in an uncertain global trade environment.
PL Capital
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
