Daily News Blog

Indian Exporters Hold the Line Against Trump Tariffs

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Welcome to India Edition, Bloomberg’s daily dive into what’s moving the worlds of business, markets and politics in this dynamic, fast-paced economy. I’m Menaka Doshi . If you didn’t receive this directly in your inbox, you can subscribe here , and share feedback with us here . Want more? Sign up for Markets Daily India, a subscriber-only newsletter featuring key insights before the trading day starts.

Today, I look at the resilience of our exporters, and my colleague Advait Palepu will dissect Reliance’s challenge in its oil business. Plus, Jeanette Rodrigues sends a dispatch from Davos.

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Resilient Exporters

I’ve returned from a brief holiday to a worsening global standoff playing out this week in Davos. So far, India is only a bystander in this new high-stakes game that US President Donald Trump is playing over Greenland.

Better still, new data shows that Indian exporters have till now put up a tough fight against Trump’s 50% tariff. They’ve resisted large-scale price cuts even though that has resulted in fewer shipments to the US — a shortfall they appear to be gradually offsetting through exports to other countries.

A January study by the Kiel Institute for the World Economy has grabbed attention for stating what most economists had warned — that Trump’s tariffs function as a consumption tax on American businesses and households. The German think tank examined shipment-level data from January 2024 through November 2025 to find that exporters absorbed only 4% of the tariff burden — the remaining 96% has passed on to American buyers.

The Institute’s study of Indian shipments found exporters “did not eat the tariff.” Export unit values to the US remained unchanged relative to other destinations, but volumes were 18% to 24% lower. “Indian exporters maintained their prices across all destinations, suggesting they were able to find alternative buyers for goods no longer competitive in the US,” the report said.

Sabyasachi Ray, executive director of the Gems and Jewellery Export Promotion Council, broadly agrees. While India’s gems and jewelry exports to the US have declined over 40% from April through December, shipments to other markets such as the UAE, Thailand, Hong Kong, France and Australia are up by between 23% and 40%. So, overall exports were down barely 0.05% in that period, Ray told me over the phone today. But these are smaller markets, requiring more intense marketing and yielding varying profit margins.

To be clear, the impact varies from sector to sector and exporter to exporter.

For instance, apparel manufacturer Gokaldas Exports is sharing up to 15% of the total 50% tariff with some US buyers. It has in turn passed on some of that burden to its suppliers, including fabric manufacturers, trims suppliers and the like, the company’s management told analysts in November. Gokaldas has mostly retained its US business and is focused on expanding sales to the UK and Europe. But smaller exporters are bearing the brunt. In Tiruppur district — also known as the knitwear capital of India — tariffs have reportedly forced production cuts of up to 30%.

It’s important to note the time factor here. If the tariffs were to persist, higher shopping bills will hurt US consumers and all those that supply them. Also, American importers are likely waiting to see if the tariffs stick before shifting to new, cheaper suppliers.

For now, though, Indian exporters seem to be holding the line… maybe in the hope of some relief soon from the US Supreme Court.

Next up, the stories you need to read, watch or listen to from us today.

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