In a major blow to Indian trade, US President Donald Trump has reimposed a 25% tariff on a wide range of Indian goods—a decision that has deeply unsettled Uttar Pradesh’s export economy, particularly in Agra, a city renowned for its footwear and handicrafts industry.
The timing of this decision has left exporters reeling. Agra alone ships out over Rs 5,000 crore worth of footwear annually, with the United States being one of its largest and most lucrative markets. After a temporary reprieve in July following an initial tariff threat in April, the fresh announcement has once again thrown exporters into a state of uncertainty. Orders that had slowly begun to resume are now stalled.
“This sudden imposition of tariffs has hit us hard. We are already seeing at least a 10% decline in revenues, and if additional penalties are imposed, our business could become unsustainable,” said Prahlad Singh, a leading footwear exporter from Agra. “After the disintegration of the Soviet Union, we pivoted to the US market. Now, Trump’s decision has pushed us back into crisis mode.”
Handicraft exporters are equally rattled. Agra exports handicrafts worth approximately Rs 1,200 crore annually—ranging from marble inlay and brassware to intricate stone items—much of it destined for American consumers.
“A 10% duty hike we could absorb, but the additional 15% makes it impossible. We’ve spent decades cultivating our presence in the U.S. market. If these orders stop, recovering that trust and market share will be incredibly difficult,” said Rajat Asthana, President of the Handicrafts Exporters Association.
Statewide Impact and Economic Risk
The repercussions are being felt well beyond Agra. Uttar Pradesh is among the top exporting states in India, particularly in sectors like leather, garments, handicrafts, brassware, and carpets. According to the Uttar Pradesh Export Promotion Council (UPEPC), carpet exports from UP to the U.S. more than doubled from USD 323 million in 2020 to USD 718 million in 2021. Cities like Bhadohi and Moradabad serve as vital hubs for hand-knotted carpets and brassware, much of which is headed for American markets.
"Exports from Uttar Pradesh to the US are phenomenal—accounting for nearly 21% of the state's total exports, valued at around Rs 38,000 crore. Handicrafts, leather goods, and carpets are among the top export items," said Mukesh Singh, Chairman of the UP Coordination Committee, Indo-American Chamber of Commerce.
"President Trump's decision to impose a 25% tariff will undoubtedly hit businesses hard. It will create serious disruptions in UP’s export momentum and also impact India’s overall GDP, given the scale of trade with the U.S.," Singh added.
Elaborating on the strategic undertone of the decision, Singh said, "This move appears to be more geo-political than economic. It's a tactic to pressure emerging economies like India into renegotiating trade terms that favor the U.S. While the U.S. seeks to project strength on global trade, the collateral damage—especially to Indian MSMEs and artisans—is considerable.”
Crisis on the Ground
Back in Agra, the impact is visible. Artisans and small exporters, many of whom operate through family-run businesses passed down for generations, are already feeling the pinch.
Prahlad Agrawal, President of the Agra Tourist Welfare Association, warned, “If new orders stop coming, many skilled craftsmen will be forced to abandon the trade. That would be a cultural loss, not just an economic one. We are not just exporting products—we are exporting heritage.”
D S Verma, Executive Director of the Indian Industries Association (IIA), said the industry is in damage-control mode. “Yes, Trump’s tariff move is a setback. But Indian entrepreneurs are fighters. If one door closes, we look for another. We are already scouting for alternative markets,” he said.
As global trade tensions escalate, exporters and artisans across Uttar Pradesh are anxiously watching the diplomatic channels between Washington and New Delhi, hoping for a breakthrough before the damage becomes irreversible.
Key Numbers at Risk
•Rs 1,200 crore worth of handicrafts exported annually from Agra to the US
•Rs 350 crore in footwear exports from Agra to the US
•USD 718 million in UP’s carpet exports to the U.S. in 2021
•21% of UP’s total exports are U.S.-bound, worth around Rs 38,000 crore
•25% tariff threatens to derail business and impact India's GDP
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