Walmart Halts Shipments from India Amid Rising Tariffs and Cost Hikes

Walmart has halted Indian shipments after President Trump's 50% tariff on Indian goods caused costs to skyrocket. Indian exporters claim US retailers, including Walmart, Amazon, and Target, are discussing alternative suppliers to find lower-tariff options. The US is India's largest export destination for clothing, and the tariffs are expected to increase costs by 30-35% and lead to a 40-50% drop in US-bound orders.

Following the recent imposition of a 50% tariff on Indian goods by US President Donald Trump, major US retailers, including Walmart, Amazon, and Target, have begun discussions with Indian textile exporters to find alternative suppliers with lower tariffs. This move comes as the US is the largest export destination for India's textile and apparel industry, accounting for 28% of total exports valued at $36.61 billion in the fiscal year ending March 2025 [1].

The new tariffs are expected to increase costs by 30% to 35% and could lead to a 40% to 50% drop in US-bound orders, resulting in a potential loss of $4-5 billion. Exporters like Gokaldas Exports have reported that brands are exploring options to avoid the higher costs, potentially leading to a significant shift in supply chains [1].

India, the sixth-largest exporter of textiles and apparel globally, may see a substantial decline in its US market share due to the tariffs. Retailers are likely to turn to Bangladesh and Vietnam, which face a 20% tariff, making Indian apparel less competitive [1].

Analysts predict that the tariffs could reduce India's GDP growth by up to 1%, with the hardest-hit sectors being labor-intensive ones such as textiles, footwear, gems, and jewelry. The Reserve Bank of India forecasts that the economy could grow at 6.5% in fiscal 2026, but this could be further impacted by the tariffs [2].

Indian officials have expressed concern about the US move, stating that it is "unfair, unjustified, and unreasonable." The Ministry of External Affairs has stated that India will take all necessary actions to protect its national interests and economic security [1].

In response to the tariffs, the Indian government is exploring alternative markets in South Asia, Africa, and Latin America. The Reserve Bank of India may also consider cutting interest rates to support domestic demand and offset export losses [2].

References:

[1] https://www.ndtv.com/world-news/amazon-walmart-target-halt-orders-from-india-after-donald-trump-doubles-tariff-on-indian-goods-9043904/amp/1
[2] https://economictimes.indiatimes.com/news/economy/policy/india-risks-1-gdp-hit-as-trump-slaps-50-tariffs-over-russian-oil/articleshow/123161849.cms