The US Trade Representative is considering a new 12.5% tariff on roughly 1,600 Indian goods, citing forced labour concerns. India Inc — led by CII and FICCI — is pushing back hard, calling the proposal "disproportionate" and pointing to India's existing labour safeguards. The auto components lobby ACMA is separately lobbying the government for the best possible deal.

This isn't an abstract policy debate. Indian exporters are already bleeding from the existing 18-50% reciprocal tariffs imposed since mid-2025. An additional 12.5% forced labour levy would stack on top of what's already there. We searched NSE filings to find out exactly how much tariffs are costing the most exposed companies — and the numbers are striking.

Garments: Gokaldas Exports is absorbing INR 40 crores per quarter

Gokaldas Exports (GOKEX), India's largest listed garment exporter, reported Q2 FY26 revenue of INR 998 crores — flat year-on-year. But the headline number hides what's really happening. Per their Q2 FY26 earnings transcript, the company shared "a considerable portion of the U.S. tariff burden with our key customers," resulting in an EBITDA decline of 18% to INR 96 crores. Management explicitly stated that adjusting for the tariff burden share, EBITDA would have grown by 17%.

The company disclosed roughly INR 40 crores in one-off tariff costs in a single quarter. At 50% tariff levels, management said there was "practically no business possible" — forcing bilateral negotiations with every US customer just to keep orders flowing. India operations grew 8% year-on-year, but that growth is invisible under the tariff weight.

Seafood: Apex Frozen Foods paid INR 86 crores in tariffs in nine months

Apex Frozen Foods (APEX) derives about 49% of its revenue from the US market — the highest concentration among the companies we examined. Per their Q3 FY26 earnings transcript, the cumulative tariff component across the first nine months of FY26 was INR 86 crores, a cost that simply did not exist the prior year.

Indian shrimp exporters face a combined US tariff of 33.12% — anti-dumping duty of 1.35%, countervailing duty of 5.77%, and reciprocal tariffs of 26%. An additional 12.5% forced labour tariff would push the effective rate above 45%, making Indian seafood uncompetitive against Ecuador (13.8% total tariff) and increasingly pushing buyers toward other origins.

Chemicals: Aarti Industries navigates a product-by-product tariff maze

Aarti Industries (AARTIIND), a major specialty chemicals exporter with 15-20% of revenue from the US, described a complex product-level impact in their Q1 FY26 earnings transcript. The company exports four major products to the US — MMA, PDCB, MEA, and NCB — of which only MEA was exempted from tariffs.

On the positive side, differential tariffs between India and China helped Aarti's phenylenediamine chain, driving "significant volume recovery." But their DCB portfolio faces increased competition from European producers who now enjoy preferential tariff treatment. Management noted that the reduction from 50%+ to 18% tariffs would bring "a margin that will accrue to all players in the value chain" — but a new 12.5% forced labour tariff would claw much of that relief back.

Pearl Global: INR 31 crores per quarter, with a Bangladesh problem

Pearl Global Industries (PGIL), another garment exporter, disclosed a tariff impact of roughly INR 31 crores per quarter in their Q2 FY26 earnings transcript. The company had to absorb part of the penalty tariff to retain US customers — a margin hit that flows straight to the bottom line.

What makes the forced labour tariff particularly concerning for Indian garment exporters is the competitive angle. Per their filing, management pointed out that Bangladesh and Vietnam enjoyed duty-free or reduced-duty access to the US market, giving them a structural advantage India lacks. An additional tariff layer would widen this gap further.

Avanti Feeds: US volumes already down 18%, now facing more pain

Avanti Feeds (AVANTIFEED), which processes and exports shrimp, saw US export volumes decline 17.9% year-on-year in FY26, per their Q4 FY25 earnings transcript. The company is actively diversifying — EU exports surged 36%, China volumes rose 24%, and Japan grew 5% — but the US remains a critical market where margins are being compressed by the 33.12% combined tariff rate.

In their earnings call, management detailed the exact tariff structure: anti-dumping duty of 1.35%, countervailing duty of 5.77%, and reciprocal tariffs of 26%. The forced labour tariff would add another layer to an already punishing cost structure.

One bright spot: companies with strong labour compliance

There is a potential silver lining, though it depends on how the tariff is ultimately structured. Companies that have invested heavily in labour standards certification could be relatively better positioned if exemptions or lower rates apply to verified compliant exporters.

Welspun Living (WELSPUNLIV), a major home textiles exporter with revenue of INR 8,415 crores in FY25, holds SA 8000 certification (a global social accountability standard) along with ISO and BIS certifications, per their FY25 annual report. If the US adopts a compliance-based approach — as India is urging — companies with auditable labour standards could gain a competitive edge over unverified peers.

What retail investors should do

The forced labour tariff is still a proposal, not policy — India is actively lobbying against it at the USTR level, and the outcome remains uncertain. But the filing evidence is clear: existing tariffs are already costing Indian exporters tens of crores per quarter in absorbed costs and compressed margins.

Investors holding shares in US-exposed exporters — particularly in textiles, seafood, and specialty chemicals — should watch three things: (1) the USTR timeline on the forced labour investigation, (2) each company's geographic revenue diversification in upcoming quarterly results, and (3) whether companies with strong ESG and labour compliance certifications receive preferential treatment. Companies like Sangam India, which reported US revenue dropping to just 0.1% of sales in Q2 FY26 per their investor presentation, are examples of businesses that have already de-risked their US exposure — a strategy that may look prescient if tariffs keep climbing.

Data sourced from company filings on NSE via Xaro.