Indian exporters supplying everything from home décor to leather footwear are staring at a critical few weeks as uncertainty over a long-pending trade deal with the US threatens to derail orders for the crucial summer shopping season next year.
Industry executives warn that January is effectively the last window to lock in large export contracts for the first half of 2026, reported Bloomberg. If negotiations between New Delhi and Washington continue to drift, exporters fear they could miss out on bulk US orders at a time when already-elevated tariffs have squeezed margins and forced painful cutbacks.
January Deadline Looms For Summer Orders
For Indian exporters, the US summer season is planned months in advance. Contracts for shipments between April and August are typically finalised by mid-January, allowing manufacturers to plan production, hire labour and secure raw materials.
“This will be the decisive month,” the news agency reported, citing several exporters, adding that without clarity on tariffs, US buyers are reluctant to commit.
The situation has become especially acute after the US imposed punitive tariffs of up to 50 per cent in August, a move that disrupted what is usually the busiest winter and Christmas season for Indian exporters in 2025.
One of the hardest hit has been India’s labour-intensive manufacturing base, including textiles, apparel, handicrafts, gems and jewellery, and leather goods. These sectors rely heavily on large, steady orders from American retailers, and even small delays in contracting can cascade into production shutdowns and job losses.
Mixed Signals From Washington
Complicating matters are mixed messages from US President Donald Trump. Over the weekend, Trump told reporters that high tariffs had pushed India to reduce its imports of Russian oil, a claim that appeared to reinforce his hardline stance.
He added that Prime Minister Narendra Modi knew he was “not happy”, and warned that because India trades with the US, tariffs could be raised “very quickly”, remarks that renewed doubts over whether Washington intends to soften its position or accelerate a trade deal.
Data suggest India has made some concessions. India’s oil imports from Russia in December fell 40 per cent from a June peak of 2.1 million barrels a day, a development Trump has portrayed as a policy win as he seeks to curb funding for Russia’s war in Ukraine.
US Remains India’s Biggest Export Market
Before trade tensions escalated, the US was India’s single largest export destination. In 2024, India shipped goods worth $87.4 billion to the US, accounting for nearly one-fifth of its total exports.
Recent data, however, point to a sharp slowdown. US government trade figures show apparel imports from India fell around 12 per cent year-on-year to $376 million in September 2025, while rug imports declined 10 per cent to $98.4 million.
“If the deal doesn’t happen quickly, then April-August and holiday shipping would be impacted,” said Gautam Nair, director of Matrix Design, an apparel manufacturer near New Delhi. “The first half would then be a complete washout.”
Exporters Scramble To Diversify Markets
With uncertainty persisting, Indian exporters are increasingly looking beyond the US. In recent months, India has signed new free trade agreements with New Zealand, Oman and the UK, while negotiations with the EU, Australia, Chile and Peru are ongoing.
At the same time, exporters are working to salvage existing relationships by offering discounts, absorbing higher costs, or travelling overseas to reassure buyers.
Lalit Thukral, founder of textile exporter Twenty Second Miles, said August to December is usually the industry’s busiest period, but this year delivered losses instead. Anticipating tougher months ahead, he travelled to the UK in November with a 15-member delegation to seek new clients.
“We are trying to get newer buyers, but it is not possible to grab them immediately,” said R.K. Sivasubramaniam, whose Tiruppur-based firm manufactures basic garments such as underwear. He plans to visit the US in January to scout for buyers after cutting production by 50 per cent since August. “Other US buyers are indefinitely gone.”
Costly Workarounds To Beat Tariffs
Some exporters are experimenting with expensive workarounds to blunt the impact of US tariffs. According to Sabyasachi Ray, executive director of the Gem and Jewellery Export Promotion Council, several firms have set up US subsidiaries to manage trade locally, while others have shifted parts of their manufacturing to countries such as the United Arab Emirates, where duties are closer to 15 per cent.
“They’ve had to change the way of doing business,” Ray said, adding that these adjustments have taken a toll on margins.
Large apparel exporters such as Raymond Lifestyle Ltd. and Gokaldas Exports Ltd. are also exploring production shifts to Africa. Gokaldas operates four factories in Kenya and one in Ethiopia, while Raymond has been considering using its Ethiopia plant to supply American buyers, where tariffs can be as low as 10 per cent.
“Exporters don’t have much choice right now,” said Ajay Sahai, director general of the Federation of Indian Export Organisations. “They are looking at alternative markets, selling locally, and one thing has become very clear, we can’t overly depend on the US for exports.”
