As of now, barring the job-intensive export sectors of clothing, gems and jewellery, leather and footwear, and marine products, India\u2019s domestic markets remain largely unaffected by the US tariff strike. <\/p>\n
Inflation fell to an eight-year low of 1.55 per cent in July, the month which saw FMCG sales and stocks pick up in the run-up to an early onset of the festive season and supply chains in other consumer segments remain intact \u2013 leaving some room for optimism. <\/p>\n
However, not just the domestic markets, even the Indian government is on the edge, anxiously waiting for Friday’s (August 15) meeting between US President Donald Trump and his Russian counterpart Vladimir Putin in Alaska. A positive outcome would bring tariff relief, but what if it goes the other way?<\/p>\n
Also read: Trump’s tariff tirade: Can India weather the storm? | Talking Sense With Srini<\/a><\/p>\n On Wednesday, August 13, US Treasury Secretary Scott Bessant warned India that \u201cif things don\u2019t go well, then sanctions or secondary tariffs could go up\u201d. Later, Trump issued a general threat of \u201csevere consequences\u201d if Putin did not stop the war in Ukraine.<\/p>\n While garment exporting units stare at a crisis with manufacturing and shipping getting stopped and several lakh workers sitting idle, especially after the penalty of 25 per cent tariff was announced on August 6, domestic supply remains unaffected.<\/p>\n FMCG sales, inventory went up in July <\/p>\n Meanwhile, a significant pre-festive uptick was seen in FMCG sales and stocks (food, beverages, commodities, personal care items, among others) in July. According to retail intelligence firm Bizom, which tracks kirana sales and stocks, FMCG sales grew by 8.6 per cent in July \u2013 up from 4.6 per cent in June and 7.3 per cent in Q1 of FY26. July sales remained stable at six per cent growth in urban areas, while rural markets clocked 10.3 per cent growth (year-on-year). <\/p>\n Harshit Bora, head of analytics at Bizom, told The Federal that the uptick in FMCG sales and stocks in July was not as strong compared to Q1 of FY26 as it was in June. That month, sales and stocks had been hit by the rains and factors such as exhaustion of the summer beverage stocks. <\/p>\n In July, he said, stocks picked up two to three weeks ahead of Rakshabandhan; while sales grew in all categories \u2013 chocolate and confectionery (16 per cent), commodities (20 per cent), dairy products (11.5 per cent) and packaged foods (seven per cent).<\/p>\n Also read: US Treasury Secretary Scott Bessent warns of higher tariffs on India<\/a><\/p>\n NielsenIQ\u2019s sequential data for Q1 of FY26 showed that FMCG grew at six per cent, up from 5.1 per cent in the previous quarter Q4 of FY25. Meanwhile, the packaging industry is struggling with pre-existing shortages in raw materials and the consequent production disruptions. <\/p>\n Garment supply uninterrupted <\/p>\n While garment exporting units stare at a crisis with manufacturing and shipping getting stopped and several lakh workers sitting idle, especially after the penalty of 25 per cent tariff was announced on August 6, domestic supply remains unaffected. <\/p>\n Bhadresh Dodhia, former chairman of the Manmade and Technical Textiles Export Promotion Council, explained that this is because garment exporters have little presence in the domestic market and vice versa. <\/p>\n Vijay Jindal, president of the Garments Exporters and Manufacturers Association (GEMA), echoed Dodhia\u2019s views. He, however, pointed out that the overall market sentiment has been gloomy ever since Trump hit India with high tariffs.<\/p>\n