Indian exporters are experiencing increased inquiries from US buyers, particularly in chemicals and textiles, but face challenges in converting these into orders due to trade policy uncertainties.
New Delhi, India Jul 2, 2026 ALN: New Delhi: Ahead of the July 24 expiry of 10% tariffs imposed by the United States, exporters of chemicals, textiles, carpets, and leather goods report a notable increase in inquiries from American clients. However, these inquiries have yet to translate into firm orders. Exporters attribute this lack of conversion to uncertainties surrounding Section 301 tariffs and the unpredictability of US trade policies.
The United States has historically been a significant trading partner for India, and this relationship has evolved over the years. In the fiscal year 2025-26, the US was India's second-largest trading partner, with goods exports increasing by 0.92% year-on-year to $87.3 billion. This figure is indicative of a broader trend where Indian exports have seen fluctuations based on global demand and trade policies. Despite the positive trend in inquiries, exporters remain cautious about the future. Ajay Sahai, director general of the Federation of Indian Export Organisations, emphasized the uncertainty surrounding the potential imposition of Section 301 tariffs, stating, "There is uncertainty on what will happen as the US may impose Section 301 tariffs. That challenge is there." This statement underscores the anxiety felt by exporters as they navigate a complex and shifting trade landscape.
Handicraft exporters have also noted an uptick in inquiries, but they have not yet converted these into orders. This trend is particularly concerning for small and medium enterprises that rely heavily on consistent orders to maintain their operations. Sharad Kumar Saraf, chairman of Technocraft Industries, mentioned, "The situation is not too bad and has improved since last month. Business is reviving and inquiries are rising." His comments reflect a cautious optimism that, while inquiries are increasing, the transition from inquiry to order remains a significant hurdle.
The backdrop to these developments includes a recent legal ruling by the US Supreme Court, which invalidated the International Emergency Powers Act (IEEPA) tariffs. These tariffs, originally imposed by the Trump administration, were set at 10% and are scheduled to expire on July 24. Previously, under the IEEPA, the US had imposed much higher tariffs of 50% on India, which were partly a response to India's purchase of Russian oil. The expiration of the 10% tariffs could potentially lead to a more favorable trading environment; however, the looming threat of new tariffs complicates this situation.
Negotiations for a trade deal between the two nations are ongoing, but the US has proposed an additional 12.5% duty on imports from 54 countries, including India, over allegations of forced labor practices. This proposal has raised concerns among Indian exporters, who fear that such tariffs could stifle their competitiveness in the US market. Furthermore, the potential for new tariffs on most Indian goods under Section 301 of the US Trade Act of 1974 adds another layer of uncertainty, with a hearing scheduled for July 7. The implications of these potential tariffs could be far-reaching, affecting various sectors of the Indian that rely heavily on exports to the US.
Mahavir Pratap Sharma, founder of Jaipur-based hand-knotted woollen carpet exporter Oscar Expo Design, expressed cautious optimism regarding the current situation. He noted, "While globally there are signs of optimism, the unpredictability of the US is a challenge and a matter of concern. Enough demand is coming, and if the war stops and the US starts looking in, business will grow." His perspective highlights the interconnectedness of global events and trade, suggesting that geopolitical stability could play a critical role in the recovery of export markets.
Pankaj Chadha, chairman of the Engineering Export Promotion Council, pointed out that engineering exports are also subject to the US' Section 232 tariffs, which were introduced as part of a broader strategy to protect domestic industries. He indicated that the upcoming July 24 deadline for the 10% tariffs would not significantly impact the engineering sector, suggesting that this sector may be better insulated from the immediate effects of tariff changes compared to other industries.
In summary, while Indian exporters are seeing increased inquiries from US buyers, the lack of firm orders highlights ongoing uncertainties in US trade policies, particularly regarding tariffs and trade agreements. The situation remains fluid, with exporters closely monitoring developments in US trade policy as they strategize for the future. The potential for increased tariffs, coupled with the complexities of international trade negotiations, presents a challenging environment for exporters who are eager to capitalize on the uptick in inquiries. As the July 24 deadline approaches, the business community will be watching closely to see how these dynamics unfold and what impact they will have on trade relations between India and the United States.
The historical context of US-India trade relations is essential to understand the current scenario. Over the past few decades, the relationship between the two nations has strengthened significantly, driven by mutual interests in trade, investment, and technology. The US has been a major destination for Indian exports, with sectors such as textiles, pharmaceuticals, and information technology playing pivotal roles. The increase in inquiries from American clients reflects a renewed interest in Indian goods, which could be seen as a positive sign for exporters.
However, the concerns surrounding the Section 301 tariffs cannot be overstated. These tariffs, which are based on investigations into unfair trade practices, have the potential to impact a wide range of products exported from India to the US. The uncertainty regarding their imposition creates a challenging environment for exporters who are trying to gauge demand and pricing strategies. For many businesses, the cost implications of tariffs can be significant, leading to adjustments in pricing and ultimately affecting competitiveness in the US market.
Moreover, the ongoing trade negotiations between the US and India are crucial in shaping the future of this relationship. Both countries have expressed a desire to enhance their ties, but the complexities of trade agreements, especially in light of domestic political pressures, can complicate these discussions. The proposed additional tariffs over allegations of forced labor practices have already raised red flags among Indian exporters, who are concerned about the potential fallout from such measures.
In this context, the role of small and medium enterprises (SMEs) in India's export landscape cannot be overlooked. SMEs often lack the resources to absorb the shocks of sudden tariff changes and are typically more vulnerable to fluctuations in demand. The reliance on consistent orders makes the current situation particularly precarious for these businesses. Exporters are calling for more clarity and stability in trade policies to help them navigate these challenges effectively.
Furthermore, the global environment is also a critical factor influencing trade dynamics. With ongoing geopolitical tensions, supply chain disruptions, and fluctuating demand patterns, exporters are facing a multifaceted set of challenges. The interconnectedness of global markets means that events in one region can have ripple effects across others, further complicating the landscape for exporters.
As the July 24 deadline approaches, the business community in India is keenly aware of the stakes involved. The outcome of the tariff discussions and the potential for new trade agreements will play a significant role in shaping the future trajectory of Indian exports to the US. The interplay between domestic policies and international trade dynamics will continue to be a focal point for exporters as they seek to adapt and thrive in an evolving market.
In conclusion, while the increase in inquiries from US clients is a positive development for Indian exporters, the lack of firm orders reflects broader uncertainties in trade policy and global conditions. The upcoming tariff deadline and the potential for new tariffs create a challenging environment that exporters must navigate carefully. As they look to the future, the ability to adapt to changing circumstances and the pursuit of favorable trade policies will be crucial for sustaining growth in the export sector.
To learn more about the latest developments in Trade & Commerce, stay updated with our exclusive reports and analyses on AiLensNews.
