Air cargo load from India to US plunges to 9-year low after tariff hikes

HYDERABAD: Steep tariff hikes by the Donald Trump administration have sent air cargo movement between India and the US into free fall, marking a nine-year low.Data from the Directorate General of Civil Aviation (DGCA) shows that India shipped 4,319 tonnes of goods to the US between Jan and June – down from 7,152 tonnes during the same period last year.Even during the pandemic years of 2020 to 2023, freight volumes ranged between 5,000 and 9,000 tonnes (approx). The last time India-US trade figures hit such lows was in 2016, when they touched 3,750 tonnes.

Representatives of the Federation of Freight Forwarders Associations in India (FFFAI) say the tariff spike has led to a significant drop in demand, pushing exporters to drastically cut order sizes. A Punjab-based trader who would ship 30 orders of engineering tools daily is now sending only 10 to 12, with just a handful of buyers willing to purchase increasingly expensive goods, a member of the association said."When Trump took office, tariff rates initially rose by 25%. It later shot up by 50%, severely affecting key export segments. Handicrafts, one of India's major exports to the US, have taken a severe beating," said Rajesh Verma, vice-chairman of FFFAI.Dealers in gems and jewellery, textiles, readymade apparel and perishable goods, all of which are part of the largest chunk of freight from India to the US, have been hit hard, say customs brokers.

"Although pharmaceuticals have largely been spared for now, products like garments, diamonds, and engineering tools have been hit hard. Products that cost $100 earlier are now priced at approximately $150. Additional restrictions imposed by US authorities have slowed clearances and affected trade volumes," said S Anil Kumar, president of the Hyderabad Customs Brokers' Association.