Trump's tariff hurts textiles

Trumps additional 25% tariff took effect today, taking the total tally on Indian exports to US at a whopping 50%, making it almost unviable vs. Bangladesh, Vietnam, Turkey, Mexico, who enjoy better access.

Textiles:

Likely Impact: Severe hit to order books, margin erosion, loss of market share.

• Welspun India → accounts for >60% of revenues (home textiles, towels, bedsheets). High risk.
• Arvind Ltd → Big denim/apparel exporter to US brands (Gap, Levi’s, etc.). High risk.
• KPR Mills → Knitwear exports significant, but also large domestic focus. Medium risk.
• Raymond → Suiting fabric exports to 55+ countries, US is important but not dominant. Retail + domestic brands cushion. Medium risk.
• Page Industries (Jockey India) → Mostly domestic business. Low risk.

Aquaculture

India is the world’s largest exporter of shrimp, with the US taking 40–45% of shipments. A 50% tariff is a big blow, and likely to shift US demand to Ecuador, Vietnam, Indonesia.

Likely Impact: Very heavy on exports, earnings downgrades likely.

• Avanti Feeds → Supplies feed to shrimp farmers. Indirect but major hit (farmers will cut stocking if exports collapse). High risk.
• Apex Frozen Foods → Direct exporter to US. Very high risk.
• Zeal Aqua (smallcap) → US exposure, high risk.
• Waterbase Ltd → Similar to Avanti, feed + processing. High risk.

IT Services

The US is the biggest market (60–65% revenue). Tariffs may not directly apply to IT services (as they are not goods), but the India-US trade climate worsening can pressure sentiment.

• Infosys, TCS, Wipro, HCLTech, Tech Mahindra – may see valuation derating due to fear of broader US protectionism.

Pharma (Generics → US is >35% of export market)

• Sun Pharma – big US generics play.

• Dr Reddy’s Labs – >40% revenue from US.

• Cipla – respiratory + generics, heavily US-linked.

• Aurobindo Pharma – US is ~50% of revenue.

• Lupin – US accounts for nearly half of sales.

Possible Beneficiaries (Domestic Focus / Protectionism Hedge)

• HUL, ITC, Britannia – FMCG, India-only.

• PSUs (SBI, NTPC, PowerGrid, LIC, IRCTC) – defensive, domestic-only exposure.

• Metals (JSW Steel, Tata Steel, Hindalco) – shielded if India retaliates with tariffs.

In response to the US 50% tariff on Indian textiles and aquaculture, the government is expected to roll out export incentives and sops, including higher duty drawback, enhanced RoDTEP rates, and cash packages for affected sectors; consider tariff retaliation on select US imports to gain bargaining leverage; and implement policy adjustments such as fast-tracked export financing, cheaper pre-shipment credit, and assistance to divert exports to other markets like the EU, Middle East, and Japan. Thus we are likely to see short term pressure on export heavy stocks but word on the street is that within two weeks or so, we could see Govt's sops coming in to protect Indian exporters.