Trump’s 50% Tariffs Threaten Modi’s ‘Make in India’

India’s flagship “Make in India” manufacturing initiative is facing a severe test after President Donald Trump announced punitive tariffs exceeding 50% on Indian exports to the U.S., sparking fears of production shifts and lost investment. The move has rattled global brands sourcing from India, threatening Prime Minister Narendra Modi’s efforts to position the country as a manufacturing hub to rival China.

Exporters Scramble to Reassure Clients

Following the tariff announcement, garment maker Gokaldas Exports — which supplies major U.S. retailers including Walmart, Gap, and Abercrombie & Fitch — said it was flooded with anxious calls from investors and customers asking if production could be relocated. “It’s been insane — at 50 per cent tariff there is no business to be done,” said managing director Sivaramakrishnan Ganapathi. “In the interim, brands are saying they’ll scale down their sourcing from India.”

The sentiment is echoed across India’s export sector, which has been banking on supply chain diversification amid U.S.-China tensions.

The tariffs land a heavy blow to Modi’s manufacturing push, which seeks to attract multinationals to shift production from China to India. Sectors including textiles, engineering goods, and consumer products could see U.S. orders slashed, forcing firms to explore other markets or downsize operations.

Economists warn that the protectionist move could also dampen foreign direct investment, as companies reassess India’s viability for long-term manufacturing contracts targeting the U.S. market.

Broader Trade Tensions

The tariff escalation marks a sharp turn in India-U.S. trade relations, with potential ripple effects across industries from IT services to pharmaceuticals. While the Indian government has yet to announce retaliatory measures, officials are weighing options to safeguard domestic industries and maintain export competitiveness.