Indian exporters across multiple sectors are confronting an urgent January deadline to secure US orders for the upcoming summer season, as prolonged trade negotiations between New Delhi and Washington threaten to disrupt critical business cycles. The ongoing 50% US tariffs imposed since August have already severely impacted India's labor-intensive export sectors, forcing companies to implement production cuts and worker layoffs.

Immediate Impact on Export Sectors

The punitive tariffs continue to devastate India's key export industries, particularly textiles, handicrafts, apparels, gems, and leather goods. Rafeeque Ahmed, chairman of Farida Group, one of India's largest shoemakers, identified January 15 as the critical cutoff date for securing bulk US orders to ensure stable revenue for summer and autumn seasons. His Tamil Nadu-based company, which derives 60% of export revenue from American markets and supplies to brands like Cole Haan and Clarks, has been forced to cut production by 20-25% and lay off workers.

Sector-Specific Performance Decline

US government trade data reveals significant import reductions across key Indian export categories. Apparel imports dropped 12% to $376.00 million in September compared to the previous year, while rug imports fell 10% to $98.40 million over the same period. Gautam Nair, director of Matrix Design, an apparel manufacturer near New Delhi, warned that failure to secure a deal quickly would impact April-August shipping and holiday seasons, making the first half a "complete washout."

Adaptation Strategies and Market Diversification

Facing sustained pressure, exporters are implementing various survival strategies. Tiruppur-based R.K. Sivasubramaniam, whose firm produces basics like underwear, has cut production by 50% since August and plans US visits in January to scout new buyers. Home-decor maker Vijay Sethi from Sethi Handicrafts has lost several American clients despite offering discounts up to 20%, with his company deriving 40% of revenue from US sales of wooden furniture and coasters.

Gems and jewelry exporters are experimenting with costly workarounds, including establishing US subsidiaries and shifting manufacturing to countries like the UAE, where duties are approximately 15%. According to Sabyasachi Ray, executive director of the Gem and Jewellery Export Promotion Council, these adaptations have "taken a toll" on business operations.

Government Response and Trade Negotiations

Despite multiple rounds of talks, including four conversations between Trump and Prime Minister Modi since August, slow progress has pressured the rupee and forced New Delhi to allocate $5.00 billion to protect Indian exporters. The government has also announced a ₹7,295 crore export package to improve exporters' access to credit.

As part of diversification efforts, India has recently forged new free trade alliances with New Zealand, Oman, and the UK, while continuing negotiations with the EU, Australia, Chile, and Peru. Major apparel suppliers including Raymond Lifestyle Ltd. and Gokaldas Exports Ltd. are considering relocating production to African countries where tariffs can be as low as 10%, with Gokaldas operating four factories in Kenya and one in Ethiopia.

President Donald Trump issued an executive order blocking HieFo Corp.'s acquisition of semiconductor-related assets from Emcore Corp., citing national security concerns. The order, released Friday, targets the Delaware-based company's $2.92 million acquisition of computer chips and wafer fabrication operations, marking the latest move by the administration to crack down on Chinese access to advanced semiconductor technologies.

Deal Structure and CFIUS Review

The transaction, completed in 2024, involved New Jersey-based Emcore Corp. selling its chips business and indium phosphide wafer fabrication operations. The Committee on Foreign Investment in the United States (CFIUS), a federal panel that reviews deals involving American companies on national security grounds, conducted a review of the transaction.

The Treasury Department stated that "CFIUS identified a national security risk arising from the transaction relating to potential access to Emcore's intellectual property, proprietary know-how, and expertise and to the potential diversion of supply of indium phosphide chips manufactured by the Emcore Digital Chips Business away from the United States."

Security Concerns and Chinese Control

Trump's executive order specifically notes that HieFo Corp., while Delaware-based, "was organized and is controlled by a Chinese citizen." The security concerns center around potential access to critical semiconductor technology and intellectual property. The order states that the deal "threatens to impair the national security of the United States."

The acquisition targeted assets comprising "the digital chips and related wafer design, fabrication, and processing businesses" of Emcore Corp., technology with applications in aerospace, defense, and artificial intelligence solutions.

Divestment Requirements

HieFo Corp. has been directed to divest the acquired assets within 180 days unless CFIUS grants additional time. The 180-day timeline reflects the administration's urgency in addressing perceived threats to US security interests in the semiconductor sector. The company has not yet responded to requests for comment regarding the divestment order.

Industry Implications

The executive order demonstrates how deals completed under previous administrations can face retroactive review when national security concerns are identified. The focus on indium phosphide chip technology highlights the strategic importance of specialized semiconductor capabilities in military and civilian infrastructure, particularly given the ongoing US-China technology competition.