Saturday, 16 August 2025
Saturday, 16 August 2025
Where is the real impact of Donald Trump’s 50 per cent tariff on India felt?
Unirox Bikes, a company that manufactures and exports bicycles from Falta Export Promoting Zone in West Bengal, had taken the first steps towards agreeing a deal with Walmart to sell bicycles in the US market.
“The idea is to sell kids’ bikes at $50 to $60 but if we are competing with Vietnam at a 19 per cent tariff and us at 50 per cent, we are not competing in an equal platform,” Subir Ghosh, managing director of Unirox Bikes, told The Telegraph Online.
On June 3, Ghosh, whose company sends bicycles to parts of Europe, Bangladesh and Bhutan, emailed Walmart expressing an interest in custom-developing bicycle models.
“We are excited to explore meaningful collaborations with Walmart,” Ghosh had written. Soon, forms for onboarding were sent and an important message from Walmart said: “Do reach out to us when the factory is ready”.
Driving the Walmart idea, Ghosh told The Telegraph Online, was a new, integrated bicycle manufacturing plant in Kharagpur, scheduled to begin production by September.
Unirox’s bicycles are a partner of Sabooj Saathi, a UN award-winning government of West Bengal project. The initiative provides free bicycles — 11.5 million have been distributed so far — to students of grades 9 to 12 in government-run and government-aided schools. This has led to promotion of education and reduction of school dropouts.
Walmart, which celebrated 20 years in India in June, said in a global communication on June 24 that it had “already exported more than $30 billion worth of goods from India and is progressing towards its goal of $10 billion in annual exports by 2027”.
But the bicycles from Bengal will have to patiently wait for their journey to the US. For now, after the tariff announcement, Walmart, Amazon and Gap, among other companies, have halted orders from India.
What is the tariff imposition all about?
The 50 per cent tariff — including 25 per cent added after a previous deadline of August 7 purportedly because Trump is unhappy about India buying oil from Russia — on Indian goods being exported to the US is “unfair, unjustified and unreasonable,” India’s ministry of external affairs has said . The tariff comes into effect from August 27.
A tariff is a tax levied on the value, including freight and insurance, of imported products. Caught in the surge are several other countries, too.
Some economists believe Trump is turning tariffs into instruments of economic and political coercion. On August 8, in a post on Truth Social, Trump said that the US would be in a 1929-like Great Depression if their Courts ruled against his use of emergency powers to decide on tariff rates.
Far away in Bengal, the Kharagpur bicycle plant is not the only company in suspended animation in the new tariff zone.
Tea and gold exports hit too
It’s a different kind of anxiety when it comes to tea and jewellery exports.
Anshuman Kanoria, chairman of Indian Tea Exporters Association, has been in the business of exporting tea for the last four decades.
“We have longstanding good relationships with importers in the US. Most of the tea going to the US is ready-to-drink tea or tea bags. A tariff like this doesn’t mean a 50 per cent rise for consumers, but perhaps 10 per cent. But one must be cautious,” he told The Telegraph Online.
“Imagine a ship has sailed from Calcutta Port before August 7, the date on which the 25 per cent tariff came into effect. Calcutta Port vessels are considered feeder vessels and not a mother vessel on which the tariff will be imposed. The ship with tea sails to Singapore or Kuala Lumpur and there will be a wait time of 15 days there before it sets off for the US. Importers don’t even know what tariff rule will apply by the time it reaches the US,” he explained.
If Kanoria doesn't sound too anxious just yet, people dealing in gold are.
“A tariff hike like this could be a big setback — 35 per cent of India’s total export of gems and jewellery is to the US market,” Shubadip Roy, designated partner of Bengal Jewellery, told The Telegraph Online.
According to the Gem and Jewellery Export Promotion Council, India’s gems and jewellery exports grew by 9.18 per cent to $2,998.04 million (Rs 25,194.41 crore) in October 2024 following a revival in the demand for cut and polished diamonds.
“For handcrafted gold jewellery, the maximum number of exports happen from Calcutta,” Roy said. “We have such fine artisans here. A major part of the raw gold work happens in Baranagar and Sithi areas. The Domjur-Howrah area is where the jewellery and diamond work happen.”
‘US-Bengal trade should be able to withstand tariff test’
In Calcutta, Sikharendra Datta, great-great grandson of Rajendra Dutt, who started business with the US from the Calcutta Port in the 1850s, is cautiously optimistic despite the climate of uncertainty.
Rajendra Dutt started business as a Calcutta agent of American merchants.
“It’s a long legacy that we heard about growing up,” Datta says. "We knew about the great relations our family had with the US traders. He [Rajendra] was not just a businessman but a social reformer, bibliophile and a homeopath.”
The family till recently was in the salt manufacturing business.
As a descendant of one of the earliest Indian trading partners with the US whose clay model is still at the Peabody Essex Museum in Salem, Massachusetts, Dutta expects “trade between America and Bengal should be able to withstand this tariff test”.
“It’s almost a 300-year-old relationship and that is being put to the test in this current economic scenario,” he told The Telegraph Online.
“It would require some resilience in the business families of Calcutta, and I am sure they have that.”
