By VBSS Koteswara Rao
India’s exports to the US reached $86 billion in FY25. However, a recent 50% tariff on many Indian goods, effective August 27, 2025, has shaken the export landscape. States like Andhra Pradesh and Telangana, that depend on exports, are feeling the impact.
This tariff is the highest the US has imposed on Indian goods. It disrupts trade and threatens jobs in sectors like textiles, seafood, and jewelry. Notably, essential goods like pharmaceuticals and electronics remain exempt.
Andhra Pradesh’s Export Concerns
Andhra Pradesh is a significant exporter, particularly of seafood, contributing over $2.3 billion to the US market out of a total of $7.45 billion in the 2024-25 fiscal year. With tariffs now reaching 50%, seafood processors and local fishing communities are in jeopardy. Agricultural exports like rice and cashew nuts also face challenges in meeting competitiveness.
The rising costs may lead to canceled orders and job losses, especially among small and medium-sized enterprises (MSMEs) crucial to the state’s export economy.
Telangana’s Trade Landscape
Telangana’s exports to the US include pharmaceuticals, chemicals, and machinery. While pharmaceuticals are exempt from the new tariffs, other sectors face increased costs, potentially lowering demand. Industrial hubs like Hyderabad could suffer economic setbacks if export orders decrease, particularly in manufacturing.
The 50% tariff poses significant risks for Indian exporters, especially in sectors that employ many workers. It effectively makes Indian goods less attractive compared to other countries with lower tariffs, such as Vietnam and Thailand.
Early estimates suggest that nearly 60% of Indian exports to the US will be affected, risking a potential 70% decrease in specific sectors. This decline could slow India’s GDP growth by up to 0.7%, impacting countless jobs linked to MSME-driven exports.
Strategies for Recovery
To tackle this setback, the government should consider the following actions:
- Launch the Export Promotion Mission with a focus on financing and market support, enabling exporters to remain competitive.
- Implement an Emergency Credit Guarantee Scheme to ease financial burdens and protect export accounts.
- Promote market diversification by exploring trade opportunities in the EU, UK, Australia, and ASEAN countries.
- Enhance support for MSMEs through liquidity assistance and access to Production Linked Incentive schemes.
- Engage in diplomatic efforts to negotiate lower tariffs for key sectors.
Advice for Exporters
Exporters in Andhra Pradesh and Telangana must adapt quickly:
- Diversify markets beyond the US to balance portfolios.
- Enhance product quality while exploring sectors less affected by tariffs.
- Optimize operations to cut costs, ensuring pricing remains competitive.
- Collaborate with government programs for technical and financial aid.
- Shift some focus to the domestic market to maintain demand.
The rise in US tariffs poses a major challenge for states reliant on exports. Immediate action is necessary to safeguard livelihoods and tap into new opportunities. Emphasizing self-reliance and a robust manufacturing sector can help India navigate this evolving trade environment.
In recent discussions on social media, many exporters express frustration over the sudden changes. They call for greater government support and highlight the crucial need to innovate and diversify.
As India grapples with changing trade dynamics, the focus on internal strengths and global relationships will be essential for future growth.
(Disclaimer: The opinions expressed in this article are those of the writer and do not reflect the views of ETV Bharat.)
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DONALD TRUMP, PRIME MINISTER NARENDRA MODI, INDIA AND US, EXPORTERS, US TARIFF, IMPACT OF US TARIFFS ON ANDHRA PRADESH AND TELANGANA
