What’s Going On with U.S. Tariffs on Indian Goods?

 Here’s a detailed blog-style breakdown of the evolving U.S. tariff policy, its ripple effects on Indian exports, and what Etsy sellers based in India should specifically consider when calculating prices—including how to handle Delivered Duty Paid (DDP) and which courier services support it.

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1. What’s Going On with U.S. Tariffs on Indian Goods?

A. Latest Policy Moves

• On July 30, 2025, President Trump announced a 25% “reciprocal” tariff on Indian imports, effective August 1, 2025 .

• On August 6, an additional 25% “penalty” was introduced in response to India’s continued purchases of Russian oil—raising the total tariff to 50%, effective August 27, 2025 .

• This dramatic escalation marks it among the highest tariffs ever imposed by the U.S. on any trading partner .

B. What Indian Sectors Are Feeling the Pain?

• Impacted industries include textiles, jewelry, gems, apparel, footwear, engineering goods, chemicals, auto components, and shrimp .

• Example highlights:

  • Cotton yarn purchases dropped by 50% because U.S. buyers sought cheaper alternatives like Vietnamese products .

  • The shrimp industry is particularly battered, with tariffs up to 50%, leading to declining prices and a re-evaluation of livelihoods .

  • Auto parts exports—valued at ~$7 billion—could fall by 15% to 20% .

  • The broader Make in India initiative is under threat, with companies reconsidering production strategies and diversification .

C. Strategic and Government Responses

• Experts and trade bodies urge diversification of markets—focusing on Europe, Latin America, ASEAN, and making use of FTAs .

• Some firms are exploring manufacturing base shifts to countries like UAE or Mexico, or even setting up in the U.S. to circumvent tariffs .

• Indian state governments, like Maharashtra, are rolling out reforms (e.g., subsidies, better industrial policy, export portals) to support MSMEs .

• Business leaders and policymakers are pressing for fiscal support to shield exporters and push GDP growth back above 6% despite headwinds .

• U.S.–India trade talks scheduled for late August were canceled, underscoring deteriorated ties .

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2. How Do These Tariffs Affect U.S. Imports from India?

• Tariff hikes of up to 50% dramatically raise the cost burden on Indian exporters, making them less price-competitive versus producers in countries like Vietnam or Bangladesh .

• Indian exporters could see reduced demand, margin compression, and potentially a shift in export volumes—unless they can absorb some costs, move operations offshore, or find alternate markets .

• At the macro level, analysts warn this may shave off around 0.5 percentage points from India’s GDP growth, potentially pushing it below 6% for the year .

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3. Etsy Sellers in India: Special Considerations

If you're selling on Etsy to U.S. buyers from India, here’s what you must account for in your pricing and logistics strategy:

A. Pricing Adjustments & Cost Transparency

• Tariffs up to 50% need to be reflected in your pricing. This could either eat into your margin or shift the cost burden to buyers.

• Consider clearly itemizing DDP (Delivered Duty Paid) pricing versus traditional listings. DDP means you, the seller, pay all duties, shipping, and customs costs—ensuring the buyer sees one final price .

B. Understanding DDP (Delivered Duty Paid)

• Under Incoterms DDP, all shipping, customs clearance, duties, and insurance are the seller’s responsibility; the goods are delivered duty-paid to the buyer’s location .

• With rising tariffs, using DDP requires careful cost calculation and may necessitate price revisions to maintain profit margins .

• DDP is buyer-friendly—simplifying delivery and reducing buyer hesitations—but it increases your liability and operational complexity .

C. Which Couriers Support DDP for India–U.S. Shipments?

• Several logistics providers offer DDP services:

  • Specialized firms like TecEx provide end-to-end DDP solutions, handling customs compliance, import risk, and completing final delivery .

  • Platforms such as JLCPCB also support DDP, often streamlining tax pre-collection and clearance .

• Major courier companies—DHL Express, FedEx International Priority, UPS Worldwide Express—generally offer DDP/DDP-like services, though specifics vary. Always confirm with your courier of choice whether they offer full DDP handling and understand any limitations.

D. Operational Steps for Sellers

1. Calculate total landed cost including item cost, shipping, insurance, tariff (up to 50%), and any brokerage fees.

2. Offer clear DDP pricing on Etsy listings—buyers pay once; no surprise customs bills upon delivery.

3. Communicate clearly in product descriptions: “DDP included; all import duties and taxes covered.”

4. Partner with trusted couriers offering DDP from India to the U.S. Ensure they are familiar with customs documentation and tariffs.

5. Adjust margins thoughtfully—you may need to increase prices or absorb part of the duty to stay competitive. Consider small markdowns or promotional offsets where needed.

6. Monitor evolving policy—tariffs may be negotiated or adjusted; be ready to respond swiftly.

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Wrap-Up

The upcoming 50% tariffs imposed by the U.S. represent an extraordinary escalation, threatening competitiveness across many Indian export sectors. The pressure on exporters—both large and small—is immense. For Etsy sellers, these developments underscore the importance of:

• Transparent, DDP-inclusive pricing

• Careful cost and margin calculations

• Partnering with freight providers experienced in DDP logistics

• Offering a seamless, no-surprises experience for U.S. buyers

By factoring in these considerations, you position your Etsy shop to weather the tariffs, maintain trust with buyers, and keep cross-border trade flowing smoothly—despite turbulent policy headwinds.

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