From textile to shrimp stocks, Trump's twin tariffs leave Indian export stocks gasping

Market experts believe this pressure could linger, particularly in stocks with significant US exposure

US President Donald Trump's double-tariff salvo hit Indian equity markets on August 7, triggering a sharp selloff in labor-intensive sectors such as textiles, seafood, and auto components. Market experts believe this pressure could linger, particularly in stocks with significant US exposure, until the tariff uncertainty clears or India's trade disadvantage narrows compared to competing nations.

As per data, all three sectors – textile stocks, auto component makers, and shrimp exporters – felt the brunt of Trump's announcement. The initial 25 percent tariff was declared on July 31 and takes effect starting today. A second penalty of another 25 percent was announced shortly after, citing India’s ongoing purchases of Russian oil, which the US alleges fuels the war in Ukraine.

This second blow also comes just before a planned US delegation visit to India in mid-August for the sixth round of trade negotiations. India's firm stand against opening its dairy and agricultural markets has irked US officials. While experts believe this could be a negotiation tactic, the twin tariffs, if fully enforced, risk bringing India-US trade to a virtual standstill.

Here’s a breakdown of how sectoral and individual stocks are reacting to the tariff fallout:

Gokaldas Exports

Roughly 70 percent of Gokaldas Exports’ revenue comes from the US market. The fresh tariff increases the competitive gap between India and other textile exporting countries such as Bangladesh, Vietnam, and even Pakistan.

Chandan Taparia, Senior Vice President at Motilal Oswal, noted that the stock is trading at its lowest level in fifteen months and has a weak structure for the upcoming sessions. He marked Rs 600 as a key support level.

The company’s management said in its earnings call that they expect margin pressure in Q2 due to both tariffs and seasonal weakness. Assuming an average tariff of 20 percent across major exporting nations and a three times markup, the margin impact on end consumers could be 7 to 8 percent. However, the management expects the impact to be temporary and margins to normalise by early FY27.

Welspun Living

With 50 percent of its revenue coming from the US, Welspun Living has already reported an 11 percent decline in revenue in the June quarter due to tariff-related uncertainties. The company now plans to take a more conservative approach in Q2 and expects continued pressure on both margins and revenues.

“Retailers and suppliers have taken a cautious stance, with inventory correction happening at the retail level. We expect demand to recover once there’s clarity on tariffs and revised cost structures,” the management said.

Taparia of Motilal Oswal projected a potential downside of another 10 percent in the stock due to continued volatility.

Pearl Global

Pearl Global expects a margin dilution of 50 to 60 basis points in Q1FY26 on a quarter-on-quarter basis due to burden-sharing of tariffs. The company’s US revenue share has dropped significantly from around 85 percent in FY21 to approximately 48 percent now.

Pearl Global absorbed around 2 percent of the tariff cost for its US clients and passed on the remainder down the value chain. However, management remains confident that its diversified manufacturing base across India, Bangladesh, and Vietnam will help soften the blow of US tariff volatility.

Bharat Forge

Bharat Forge derives around 40 to 45 percent of its revenue from the US. Analysts at YES Securities have cut their FY26 and FY27 earnings per share estimates by 11.5 percent and 5 percent, respectively.

The analysts cited the dual impact of the new US tariffs and stricter emission regulations in North America as reasons for a cautious export outlook. While Q2FY26 is expected to remain muted, the company expects a recovery in the second half of FY26, largely driven by exports.

Raja Venkatraman, co-founder of Neotrader sees support zone down 40 percent from current market price at Rs 680, with resistance placed around Rs 800.

Sona BLW

Around 30 to 35 percent of Sona BLW’s revenue is linked to the US market. Although global tariff wars and a weak macroeconomic outlook continue to present headwinds, the company’s decision to scale up production in Mexico could provide a buffer against these pressures, according to independent analyst Ambareesh Baliga.

Technically, the stock is at its lowest level in four years. Taparia sees Rs 380 to Rs 400 as crucial support zones, compared to the current market price of Rs 435.

Avanti feeds 

As of the March quarter last year, Avanti Feeds derived 77 percent of its revenue from the North American market. Indian shrimp exports are highly vulnerable to US policy decisions, with nearly 48 percent headed to the US.

Taparia expects the stock structure to remain weak in the near term, with potential downside of up to 10 percent amid tariff-linked risks.

Apex Frozen Foods

In its March quarter investor presentation, Apex Frozen Foods revealed that 53 percent of its revenue comes from the United States.

Currently, Indian shrimp exports to the US face an effective customs duty of 17.7 percent, including 5.7 percent countervailing duties and 1.8 percent anti-dumping duty. With Trump’s proposed additional tariffs, this could surge to 50 percent within 21 days.

Venkatraman of Neotrader, said that the stock has near-term support at Rs 200 and resistance around Rs 230.

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