- The short (what flipped Day-2)
- Who blinked: price cuts vs order deferrals
- HS code heatmap (first-order)
- Carve-out/deferral chatter
- Rupee/curve: RBI watchlist
- FAQ
The short
- Negotiation stance: Buyers sought ex-tariff pricing; sellers pushed for shared burden or volume guarantees.
- Early movers: Low-margin SKU lines in apparel/footwear blinked first; gems/jewellery leaned on inventory buffers; shrimp asked for staggered deliveries.
- Currency cushion: A softer INR cushioned part of the shock, but not enough for thin-margin exporters.
Who blinked — export desk re-pricing
Buyer-favoured (price cut today)
- Fast-fashion apparel basics; low-differentiation footwear
- Flat discounts or ex-tariff quotes; tighter payment terms
Seller-favoured (hold line/deferrals)
- High-ticket jewellery SKUs; bespoke furniture
- Shorter production runs; deposits; bonded-warehouse routing
Play the margin tree: protect differentiated SKUs; triage commodity lines; switch to make-to-order where feasible.
HS code heatmap (first-order)
| Bucket | HS codes | Desk reality (Day-2) | Solutions |
|---|---|---|---|
| Apparel/Textiles | 61/62/63 | Discount asks 5–10% on basics; premium lines resist | Shift mix to EU/Japan; accelerate FOB renegotiations |
| Gems & Jewellery | 71 | Selective deferrals; insured inventory | Bonded-warehouse routing; event-led drops |
| Footwear | 64 | Retail inventory overhang risk | Shorter cycles; smaller batches |
| Furniture | 94 | Housing-linked slowdowns; custom orders hold better | Duty-drawback via 3PL; SKU rationalisation |
| Seafood (Shrimp) | 03 (0306) | Staggered shipments; cold-chain costs rise | Diversify to Japan/EU; insure perishables |
Carve-out & deferral chatter
- Targeted relief windows: Keep SKU-level HS codes and certificates handy for any temporary waivers.
- Contract language: Switch to ex-tariff clauses; embed automatic re-pricing triggers.
- Routing options: Evaluate near-shore assembly or alt-lanes where value-add can shift tariff treatment.
Rupee/curve — RBI watchlist
Monitor LAF usage, VRR/VRRR fine-tuning, and any OMO/Twist hints. A stable belly in G-secs suggests smoothing; sharp INR gaps increase odds of operations.
Desk note Pre-clear higher FX cover ratios; increase receivables surveillance for U.S.-exposed MSMEs.
FAQ
- Will INR fully offset tariffs? Unlikely; currency moves cushion but don’t erase a 25pp jump.
- Who reports first pain? Thin-margin, buyer-driven categories (fast-fashion basics, low-end footwear).
- Best near-term hedge? Shorter contract tenors, SKU mix shift, layered FX hedges.