On the southern coast of India, in the bustling shrimp ponds of Andhra Pradesh and the weaving rooms of Bhadohi’s famed carpet belt, a sense of foreboding hangs thick in the humid August air. For decades, these regions have thrived as engines of India’s export economy, sending everything from succulent shrimp to hand-knotted rugs to eager buyers in the United States. But with President Donald Trump’s announcement of a sweeping 50 percent tariff on Indian exports—set to take effect August 27, 2025—livelihoods are suddenly at stake, and the future feels anything but certain.
“We were shocked with the 25 percent tariff, and thinking about how to meet this problem, how to face this,” said Ishtiaq Ahmad Khan, a fourth-generation carpet maker from Bhadohi, in remarks reported by The New York Times. “But now it’s 50 percent, so it became impossible. We’re afraid that a lot of people will be unemployed.”
Mr. Khan’s anxiety is echoed by shrimp farmers like V. Srinivas of Veeravasaram village in Andhra Pradesh. He has already mortgaged his family’s land and is reeling under $45,800 in outstanding loans. “These prices will not help me get any profits and I will not be able to pay off my loan,” Srinivas told Reuters. The price exporters now offer for shrimp has plunged by nearly 20 percent since the tariff shock, wiping out most of the slim profits that kept thousands of small farmers afloat.
India’s shrimp industry, centered in Andhra Pradesh and employing around 300,000 farmers, has long relied on the US as its biggest market—supplying supermarket giants like Walmart and Kroger. Shrimp alone accounted for 40 percent of India’s $7.4 billion in seafood exports last year, according to Reuters. But the new tariffs are threatening to upend that relationship overnight, with many farmers contemplating a switch to fish farming, vegetable retailing, or other local businesses just to survive.
The pain is not limited to aquaculture. Bhadohi, at the heart of India’s carpet industry, faces its own existential crisis. Nearly 98 percent of carpets produced here are exported, and almost 60 percent of those go to the United States. For American buyers, a $500 rug now comes with a $125 tariff—and soon, a potential $250 one. Manufacturers like Mr. Khan, whose profits are already razor-thin, simply cannot absorb these costs. He estimates that 2.5 million people in the region could be plunged into subsistence-level poverty if the tariffs persist.
Other sectors, including textiles, garments, and furniture, are also bracing for impact. Together, these industries employ millions and have been vital in keeping India’s economy resilient during times of crisis. The threat is so severe that Kirit Bhansali, chairman of India’s main gems and jewelry association, warned that 30 percent of the global trade in Indian gems could be at risk. “A blanket tariff of this magnitude is severely devastating for the sector,” Bhansali wrote, as reported by The New York Times.
What’s driving this transcontinental trade shock? Officially, President Trump’s administration cites India’s ongoing purchases of Russian oil as justification for the punitive measures. The initial 25 percent tariff—already the highest among major economies—will double to 50 percent on August 27, 2025, as a penalty for New Delhi’s energy deals with Moscow. While the US-China tariff battle has eased, with a 90-day truce extension announced on August 11, trade talks with India have stalled. A planned American delegation visit to India, originally scheduled for August 25, is now likely to be postponed, according to PTI and India Today.
This is not the first time India has found itself in the crosshairs of US trade policy. As India Today points out, the current standoff bears an uncanny resemblance to the late 1980s, when the US launched its “Super 301” initiative to target countries with so-called unfair trade practices. Back then, Japan was the main focus, but India was soon added to the list, facing demands for market access in insurance, films, and foreign investment, as well as stricter patent laws. While India ultimately avoided retaliatory action by opening up its economy in 1991, the echoes of that era are unmistakable today.
“The US is guilty of double standards. We find them placing barriers in each area in which we become competitive,” said India’s Commerce Minister Dinesh Singh in 1989—a sentiment that could just as easily describe the mood in New Delhi today, as reported by India Today. The sense of déjà vu is not lost on experts. “How the United States went from organizing a counter China coalition to organizing a counter India coalition will be retold someday as one of the strangest stories in American diplomatic history,” wrote Asia policy advisor Evan A. Feigenbaum on X (formerly Twitter).
Critics argue that the US is applying a double standard by punishing India for buying Russian oil while ignoring China’s similar purchases. US Secretary of State Marco Rubio defended the approach, saying that secondary sanctions on China could drive up global energy prices, while targeting India is seen as less risky in that regard. John Bolton, former US National Security Adviser, cautioned that “Trump’s leniency on the Chinese, and heavy-handed tariffs on India, jeopardize decades of American efforts to bring India away from Russia and China.”
The impact on the ground in India is immediate and severe. Orders from US clients have been paused, exporters are slashing prices offered to farmers and manufacturers, and the future of entire communities hangs in the balance. “There’s hardly a 20-25 percent profit for us on good days, and if that’s getting eaten up, what else is left?” asked Gopinath Duggineni, chief of a local union in Ongole, Andhra Pradesh, in comments to Reuters. Farmers and business leaders are now appealing for financial support from state governments, but with federal officials urging states to manage their own crises, meaningful relief seems elusive.
The uncertainty extends to other sectors as well. While Indian pharmaceutical exports to the US are currently exempt from tariffs, President Trump has threatened future levies of up to 250 percent. Semiconductors and energy products are also exempt for now, but the specter of new restrictions looms large, especially as the Trump administration promises to kick-start more US-based manufacturing.
Prime Minister Narendra Modi, in his Independence Day address from the Red Fort, alluded to the tough times ahead without naming Trump or the tariffs directly. “The greater a nation’s reliance on others, the more its freedom comes into question,” Modi said, echoing the self-reliance championed by earlier Indian leaders. Yet for many in India’s export-driven heartlands, the prospect of going it alone is cold comfort.
As the August 27 deadline approaches, the story of India’s shrimp farmers, carpet weavers, and countless others is one of resilience tested by forces far beyond their control. Whether relief comes from new markets, government intervention, or a diplomatic breakthrough remains to be seen. For now, the livelihoods of millions hang in the balance, caught in the crossfire of a rapidly shifting global trade war.
