Indian exporters of leather goods, garments and footwear are entering the spring–summer order season under mounting pressure, as steep US tariffs and prolonged uncertainty over a bilateral trade deal weigh heavily on negotiations with American buyers.
With the United States remaining India’s largest market for several labour-intensive sectors, exporters say survival has become the immediate priority. To retain buyers, Indian suppliers are offering discounts of around 20%, while US buyers are trimming their margins by 7–8%, according to a report in The Times of India.
The core challenge lies in tariff disparities. While competing sourcing destinations face US duties of 15–20%, Indian products are subject to tariffs of nearly 50%, eroding profitability. Exporters warn that the current cost-sharing arrangements are unsustainable and can only be maintained for a limited period in the hope that a trade agreement is concluded.
However, confidence in a near-term resolution is fading. There is still no clarity on whether or when the trade deal will be finalised, even as US President Donald Trump has continued to harden his stance on tariffs. Industry executives say this uncertainty is already influencing order discussions for the next season, with some American buyers reassessing their sourcing strategies and evaluating alternative markets.
Any shift away from India could have serious consequences. Leather and textile sectors are among the country’s most employment-intensive industries, supporting millions of jobs across manufacturing clusters. Industry veterans warn these segments would be among the worst hit if orders migrate elsewhere.
Exporters are exploring diversification, particularly towards Europe, where negotiations for an India–EU free trade agreement are progressing. Yet expectations remain cautious, as any benefits are unlikely to materialise immediately due to ratification timelines.
Despite the challenges, the US market continues to dominate exporter strategy due to its scale and efficiency. Larger orders, fewer buyers and simpler product requirements make it difficult to replace, exporters say.
Meanwhile, limited communication from the government has added to industry unease. Officials have acknowledged that the US has reviewed India’s trade offer, but no further updates have been shared. As a result, exporters are bracing for another cycle of uncertainty just as they ramp up production planning for the next season.
