Mixed response in MP to US tariff as exporters explore new markets

The United States’ decision to impose a 25 per cent tariff on imports from India has been deferred until 7 August. The industrial sector of Madhya Pradesh has given a mixed response to the new tariff. Some industrial bodies believe that, given the volume of exports from the state, the tariff will not have a significant impact, while others feel the state should begin exploring new export markets.

 

Major exports from Madhya Pradesh to the US include agricultural and pharmaceutical products, auto parts, textiles and jewellery.

 

Gautam Kothari, President of the Pithampur Industrial Association, told Business Standard, “The state does not export heavily to the US. From clusters like Pithampur, Bhopal, Indore and Dewas, exports of pharmaceuticals, auto components and textiles are made to the US. The pharma sector is outside the scope of this tariff hike, but other sectors will certainly be affected by Trump’s announcement of a 25 per cent duty.” 

 

Kothari added, “To avoid the pressure of tariffs, industries in the state may consider cost-cutting measures. Additionally, they could explore routing goods to the US through countries that have trade agreements with the US or where lower tariffs apply.”

 

Sudhir Mehta, Chairman and Managing Director of Pinnacle Industries Ltd, a leading company in the special vehicle sector, told Business Standard, “I expect a resolution between the two countries very soon. Even if the tariff is implemented for a month or two, it won’t have a major impact. In the auto sector, companies don’t switch vendors overnight. So despite the tariff hike, US automobile manufacturers will continue sourcing components from us.”

 

Sanand Mohan Purohit, Assistant General Manager (Finance) at Kusum Healthcare Pvt Ltd, a pharma company, told Business Standard, “The pharma sector is currently not affected by the new tariff, but overall, the industry will feel the impact of the hike. If the two countries don’t reach an agreement within the next 15–20 days, we’ll have to start looking for alternative markets beyond the US. If tariffs are imposed on medicines, it will be very difficult to continue business with the US, especially since generic drugs already operate on very low margins.”

 

Rajeev Agrawal, President of Mandideep Industries Association, told Business Standard, “Madhya Pradesh exports soybean products, aluminium, cotton, basmati rice, pharma, auto components and jewellery to the US. Industrial areas like Bhopal, Mandideep and Dewas are particularly dependent on the US for pharma, auto parts and jewellery. Due to high costs, soybean and agricultural products may lose out in global competition. Pharma companies may see shrinking margins as they already operate on thin profits. Jewellery manufacturers in the Indore–Bhopal region may experience a drop in US orders. Cotton and textile industries may face challenges due to cheaper supplies from Vietnam and Indonesia.”

 

He also noted that exports from India to the US account for barely 2 per cent of the US GDP. Thus, while the tariff hike will impact Madhya Pradesh’s exports, it may not be overwhelmingly significant.

 

According to industry data, Madhya Pradesh exports goods worth approximately ₹66,000 crore annually. Of this, exports to the US amount to around ₹12,000 crore per year. Between April and June 2025, the state exported goods worth ₹3,254 crore to the US.