Amazon and Walmart freeze imports from India amid Trump’s tariffs, hitting exporters and reshaping global retail supply chains.
In August 2025, India’s exporters woke up to a shock. Two of their largest U.S. retail customers—Amazon and Walmart—had paused or scaled back procurement from India.
The reason? President Donald Trump’s sweeping tariffs, which slapped up to 25% duties on a wide range of Indian goods.
The decision, while framed as a supply chain review, is sending ripples through India’s manufacturing hubs and reshaping the global retail sourcing map.
Why Amazon and Walmart Are Shifting Away from India
Both companies operate on thin profit margins and massive procurement volumes. Tariffs instantly make Indian goods less competitive in U.S. retail. To avoid price hikes for American shoppers, Amazon and Walmart are:
- Redirecting sourcing to Vietnam, Bangladesh, and Mexico, where tariff exposure is lower.
- Consolidating suppliers to reduce freight costs and political risk.
- Diversifying into near-shoring models to shorten delivery cycles.
Impact on Indian Export Sectors
This move hits India’s labor-intensive industries hardest:
- Textiles & Apparel: Large garment clusters in Tiruppur, Ludhiana, and Surat are facing order cancellations worth millions of dollars.
- Handicrafts & Home Décor: Artisans in Rajasthan and Uttar Pradesh are losing a critical export channel.
- Electronics Accessories: Cable, charger, and small electronics makers face declining POs (purchase orders) from U.S. partners.
For many small businesses, Amazon and Walmart accounted for 50% or more of exports—making this not just a setback, but a survival crisis.
The Political Undercurrent
While this is a commercial decision on paper, trade analysts argue it aligns with the White House’s protectionist strategy. Major corporations rarely move against the tide of U.S. trade policy. Cutting India imports sends a message: companies are adapting to Trump’s America First playbook.
India’s Counter Strategy
The Modi government and export councils are moving quickly to contain the damage:
- Market Diversification: Targeting EU, Middle East, and ASEAN retail markets.
- Digital Pivot: Expanding Indian brands on global platforms like Shopee, Lazada, and Carrefour.
- Policy Pressure: Seeking tariff rollbacks via WTO channels and bilateral talks.
Long-Term Implications
If tariffs stay in place:
- India risks permanently losing U.S. retail market share.
- Competing nations like Vietnam and Bangladesh could cement themselves as preferred sourcing hubs.
- U.S. buyers may become less reliant on Indian manufacturing, impacting the country’s trade balance.
This isn’t just a tariff story—it’s a rewiring of the retail supply chain.
