US Drastically Reduces Tariffs on Indian Goods, Sparking Export Sector Revival
In a significant development for international trade, Indian exporters have expressed immense relief following the United States' decision to substantially reduce tariff rates on Indian goods. The tariffs have been slashed from a prohibitive 50 per cent down to a more manageable 18 per cent, injecting fresh optimism into the export sector and prompting immediate re-engagement with American buyers to revive previously stalled operations.
Background of the Tariff Hikes and Their Impact
Exporters detailed that the challenging situation began when the US initially imposed a 25 per cent tariff in July 2025. This was followed by an additional 25 per cent penalty tariff in August 2025, which cumulatively pushed the total duty burden to a steep 50 per cent. This dramatic increase had effectively brought exports to the United States to a virtual standstill, triggering widespread concern and financial pressure across various export-driven industries throughout India.
With this sharp and welcome rollback in tariffs, exporters across the nation are now anticipating a gradual but steady recovery in trade volumes and business activity with one of their key international partners.
Uttar Pradesh's Export Performance and Current Challenges
Alok Srivastava, Assistant Director of the Federation of Indian Export Organisations (FIEO), provided context on the state's export landscape. He revealed that Uttar Pradesh had achieved a historic export turnover of Rs 1.86 lakh crore during the 2024–25 fiscal year. Notably, during this same period, the state accounted for nearly 19 per cent of India's total exports destined for the United States, amounting to approximately Rs 36,000 crore.
Srivastava further explained that exporters in Uttar Pradesh, as well as in other regions of the country, had been operating under severe strain since April 2025 due to successive tariff increases. The August penalty, in particular, delivered the most crippling blow to their operations and profitability.
Strategic Advantage and Government Efforts
R.K. Jalan, the Former Chairman of the Council for Leather Exports (CLE), highlighted a crucial competitive advantage resulting from the tariff reduction. He stated that India now enjoys the lowest US tariff rates within the South East Asia region, positioning it favorably even against major competitors like Vietnam. Jalan credited the sustained and diligent negotiations conducted by the Ministry of Commerce and Industry and its officials for achieving this beneficial outcome.
Sector-Specific Readiness and Economic Impact
Echoing the sentiment of readiness, former CLE Chairman and prominent leather exporter Mukhtarul Amin confirmed that exporters are fully prepared to resume shipments to the US. He expressed confidence that pending orders would start flowing in promptly, stating, "Exporters had been waiting for this moment. India's trade relations with the US have always been strong."
Amin provided specific figures, noting that while India exports goods worth about Rs 36,000 crore annually to the US, the city of Kanpur alone makes a substantial contribution of nearly Rs 2,500 crore to this total. Leather exporter Prerna Verma described the US decision as a major relief and predicted that the sector would regain its lost momentum within the next five to six months.
Asad Iraqi, Chairman of the Regional Leather Export Council, summarized the renewed optimism, stating that the reduced tariff has effectively given fresh life to the entire export sector, paving the way for recovery and future growth.
