Pune | Kolkata: US demand for Indian exports remains weak despite significant tariff cuts, as policy uncertainty and geopolitical tensions weigh on consumer sentiment, industry executives said.
Shipments of shrimp and textiles are yto pick up due to inventories accumulated during the earlier 50% tariff regime and the ongoing Section 301 probe. Shrimp exports to the US fell 15% year-on-year in the April-December period, while textile shipments declined 16%.
After the US Supreme Court rejected President Donald Trump’s tariff on imports, the United States Trade Representative (USTR) launched Section 301 investigations to examine whether countries maintain “structural excess capacity” in manufacturing through subsidies, suppressed wages, or other trade-distorting policies.
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“These investigations are likely to restrict the pace of export recovery for US-dependent sectors,” industry leaders said.
The textile industry, while optimistic about the current tariff structure, remains concerned about the probe’s outcome. “The Indian textile industry is closely monitoring the ongoing Section 301 investigations, given their potential implications for market access in the US,” said Chandrima Chatterjee, secretary general, Confederation of Indian Textile Industries (CITI).
If violations are found, the US could impose punitive measures such as tariffs.
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“The recent geopolitical developments, especially in West Asia, coupled with policy uncertainties linked to evolving US trade positions, have contributed to a cautious, even bearish, market sentiment in the US. This could moderate the pace of recovery and temper the full potential upside from tariff rationalisation,” Chatterjee said.
Shrimp exporters have started feeling the impact, with farm-gate prices declining 10-15% over the past three weeks. “Buyers from regions like Boston, who usually prefer long-term contracts, are hesitant to commit,” said an exporter, requesting anonymity.
Pawan Kumar G of the All India Seafood Exporters’ Association said, “US buyers still hold high-cost inventories purchased when the tariff was 50%.”
To allay concerns around excess capacity, the commerce ministry has collected data from affected industries on installed capacities, global value chain positioning, policy support, and employment to demonstrate that the Indian textile industry does not contribute to global distortions arising from excess capacity.
In contrast, gems and jewellery exports are showing early signs of recovery. Shipments of studded gold jewellery rose 8.87% year-on-year in April-February 2026, although cut and polished diamond exports declined 6.71% during the period.
