Indian exporters delay shipments amid US tariff uncertainty

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• Textile, gem, and seafood exporters halt shipments over tariff doubts
• US court ruling on tariffs confuses Indian exporters
• Exporters await US Customs updates before resuming shipments

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The ongoing volatility surrounding U.S. tariffs have put leading exporters in the textiles, gems and jewellery, and seafood sectors in a tough spot as suppliers await more clarity on trade rules and duty structures, before despatching thier shipments, industry executives told Moneycontrol.

A U.S. court on Friday struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA), casting uncertainty over the legality of trade arrangements negotiated under the measure. However, within hours of the ruling, President Donald Trump indicated that he would invoke Section 122 of the Trade Act of 1974 to levy a global tariff. Initially proposed at 10%, the rate was raised to 15% the following day.

Thus, the uncertainity related to tariffs have left the exporters to adopt a wait and watch strategy rather than ramping up supply.

The shrimp exporters have held back their shipments as requested by their respective buyers, according to Gunturu Pawan Kumar,  Managing Director of Sprint Exports Pvt. Ltd. and the National President of the Seafood Exporters Association of India (SEAI).

"There is too much confusion and there is no official clarification over the duties. We are eagerly waiting for any updates on the Customs and Border Protection (CBP) website, which can be expected in next one or two days. It's too early to predict the demand as the orders have been really slow. For now, buyers have queries related to the tariff refunds since IEEPA is deemed illegal after the ruling," Kumar told Moneycontrol.

U.S. Customs and Border Protection (CBP) has yet to update its Cargo System Management Service to remove the duties imposed by Trump under the IEEPA.  Shrimp is India’s largest agricultural export to the US, valued at $2.4 billion out of total agri-exports of $5.9 billion in FY25.

Gems and jewellery exporters, whose outbound shipments are valued at nearly $10 billion, have also decided to pause consignments for at least a week as they assess the evolving trade situation and await clearer policy direction.

"The gems and jewellery players are definitely going to be in a good spot if the rates stand where they are, given India is one of the largets exporter for diamonds, however exporters are looking to hold the shipments for a week or so, to understand what rates are to be fixed or what new strategy Trump is going to deploy," said Sabyasachi Ray, Executive Director, of the Gem & Jewellery Export Promotion Council (GJEPC).

The textile exporters are also adopting a cautious stance, industry players flagged, as the latest rates have wiped off any competitive edge the exporters enjoyed with the recently concluded trade deal with the U.S..

"Businesses can survive tough conditions but very difficult to survive in uncertain conditions. If you talk to any exporter today, the reaction is going to be that we are waiting and watching. The unfortunate thing is where we had thought that there will be some... advantages over some countries may not be so. We will all be on an equal footing," said Rahul Mehta, Chief Mentor, Clothing Manufacturers Association of India (CMAI).