Dr. Rakesh Kumar on U.S. Reciprocal Tariffs: “A Shock for Indian Handicrafts Sector, But Also an Opportunity”

Greater Noida (10 April 2025): In a significant development affecting global trade dynamics, the United States has imposed reciprocal tariffs on a range of Indian exports, including key items from the handicrafts sector. This move, aimed at balancing trade and addressing market access issues, has raised concerns among Indian exporters who rely heavily on the U.S. market—which accounts for over one-third of India’s total handicraft exports. Industry leaders, including Dr. Rakesh Kumar, Chairman of India Expo Centre & Mart, have termed the decision a “major economic setback” for the sector, comparing its impact to a second wave of COVID-19. While the U.S. has announced a three-month transitional relief period, stakeholders urge the Indian government to introduce policy measures and explore new markets to reduce overdependence on a single country.

In an exclusive interview with Ten News Network, Dr. Kumar described the situation as “the talk of the world”, stating that Indian handicraft exporters are deeply affected. He explained, out of the total Indian Handicraft exports, nearly 34-36% go to the United States, making it our largest market, followed by Europe and then the rest of the world. So naturally, any shift in U.S. trade policy hits us the hardest.

Dr. Kumar expressed that the sudden tariff changes were unexpected and shocking for both exporters and overseas buyers. This was like the second wave of COVID-19 for our sector, he said. Only difference being that COVID was a natural disaster, while this is an economic disaster. Nobody saw it coming—not the buyers, not the exporters.

He elaborated on the two sets of exporters who’ve been affected:

Those with ongoing production and shipping, where goods are either in factories or en route to the U.S and those whose orders were in the negotiation or pre-production phase.

For the first group, buyers are now requesting exporters to either stop shipments or enter duty-sharing agreements—typically around 13-15%, which cuts deep into the exporters’ profits. Exporters are really in a dilemma, he said, and the government too hasn’t yet announced any clear policy response.

He called for urgent policy intervention from the government. This is not just a problem for handicrafts, Dr. Kumar stressed, but for multiple sectors across India. We have submitted a memorandum to the government and also approached the Prime Minister, requesting specific policy support and incentives to mitigate this transitional phase.

Dr. Kumar emphasized the importance of diversifying India’s export markets, saying, being dependent on a single market is risky. Even China, which has a large population, could become a buyer for Indian handicrafts. He encouraged exporters to explore new geographies and digital business models, particularly drop-shipping and warehouse-based models, where Indian products can be stored in U.S. warehouses and sold on-demand.

Touching upon India’s global competition, he provided a comparative analysis: “While tariffs have hit India, other competitors like China, Vietnam, South Korea, and Thailand are facing even harsher duties. For example, Chinese handicraft tariffs went from 52% to 104% recently, making them less competitive. Compared to them, India is still in a better position in terms of price and market appeal.

He also highlighted the upcoming IHGF Delhi Fair, to be held from April 16 to April 19 at India Expo Centre & Mart, where a significant number of American buyers are expected. We’re unsure how they will calculate duty implications at the fair, he noted, but we must approach this situation with a broader global perspective.

In a recent development, Dr. Kumar shared that the Trump administration has announced a three-month transitional relief, which may bring some breathing space to Indian exporters. He’s hopeful this will open the door for new bilateral tariff negotiations. If we can import American raw materials like timber and use them in our products, he explained, the re-exported goods may benefit from better tariff structures under the new policy.

Concluding on a cautiously optimistic note, Dr. Kumar emphasized that Indian exporters are resilient and competitive. This is a transitional period, maybe 3 to 6 months. After that, things will stabilize. Our exporters are experienced entrepreneurs—they will adapt, react, and come out stronger like a rising star.

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