Indian American communities and businesses grapple with Trump's tariffs

American small businesses that rely on goods from India are feeling the strain after President Donald Trump imposed 50% tariffs on imports from the nation.

From restaurants to clothing shops, owners say U.S. trade policy is reshaping their bottom line in ways they can’t control. Their options are limited: absorb the costs, raise prices and risk losing customers, or cut back on traditions that make their businesses unique.

The Trump administration recently doubled tariffs on Indian imports to 50% as a punishment for Indian purchases of Russian oil, which Trump says is helping support Russian President Vladimir Putin’s war in Ukraine.

The Indian government has called the tariffs “unfair, unjustified, and unreasonable.” Just days after the tariffs went into effect, Chinese President Xi Jinping, Indian Prime Minister Narendra Modi and Putin held a trilateral meeting, and some analysts say India’s alignment with Russia and China makes Washington’s tariff push riskier and complicates U.S.-India relations.

The geopolitical considerations come alongside very real economic consequences for some businesses in the U.S.

At All India Cafe, a family-run restaurant chain in Southern California, the price of importing the authentic Indian spices and liquor that define the menu has “almost doubled.” Owner Pawandeep Kaur Khinda, whose parents emigrated from India to open their first Pasadena location in 1996, is weighing whether to raise menu prices, cut staff hours or even shutter the business.

She knows absorbing the costs cannot last.

“I’m going to have to start raising prices in a week or two. … I don’t want to have to close my doors down, because this is my bread and butter,” Khinda said.

Her restaurant has survived other downturns, she said, but this feels different.

“Honestly, it was easier to survive during Covid than it is to survive now,” she said.

Unlike larger chains, Khinda says, small family businesses can’t afford to stockpile supplies.

“It feels like the government wants the bigger fish to stay and the smaller fish to go away,” Khinda said.

For Khinda, the tariffs threaten nearly three decades of family tradition. The thought of closing one of her locations “does cross her mind.”

“At the end of the day, we have bills to pay,” Khinda said. “I have employees to pay. I have a family to run. If I’m not taking any profits home, how much longer can I keep doing this?”

India counts the U.S. as its single largest export partner, and Indian goods exported to the U.S. totaled $87 billion in 2024, according to the Office of the U.S. Trade Representative. (India’s massive pharmaceutical and electronics sectors are exempted from the tariffs.)

The textile and garment industry is the third-largest employer in India, employing about 45 million people throughout the country. In Artesia, California, home to a bustling Little India neighborhood, tariffs have “shaken” the community, according to Heeral Mehta, who runs Sari Palace, an Indian clothing boutique.

Mehta said she is already bracing for the possibility of shutting down her store. On a recent shipment of 200 bridal outfits, she said she paid $62,000 in tariffs.

“I haven’t paid myself all year because it’s all gone toward tariffs,” Mehta said.

Mehta says trying to manufacture Indian clothing in the same capacity in the U.S. is “impossible,” as hand embroidery is a deep-rooted generational craft.

“If store owners are going to start increasing their prices, people are going to start going to India to shop,” Mehta said. “So it’s actually doing the reverse of what this is meant to do.”

Sumeer Kaur, founder of Lashkaraa, launched her clothing company at 19 with just $1,200. Now, 11 years later, she employs 600 people in India. Each morning, she wakes up hoping to hear news of a trade agreement.

“We’re gonna monitor the next three to four months and then beyond that, if there’s nothing like a trade deal reached, [if] we still have crazy tariffs for India, at that point we may introduce a standard tariff charge per order,” Kaur said.

Back in India, the consequences are already visible. In Surat, known as the “textile capital of India,” Kaur says local mills are running at half capacity, despite it being the busiest season.

“It’s not as busy this year. It’s very dead,” she said. “And I feel like, in some ways, it’s even more dead than Covid right now.”

“We’re registered in the United States. We’re paying taxes in the United States. Our customers are paying sales tax in the United States. If our revenue is getting less, then so are our taxes,” Kaur said. “Either your business or the consumer is paying this tariff. So it’s like, I don’t see how this is benefiting anyone at all right now.”

In 2017, Michelle Ranavat founded Ranavat, a skin care and hair care brand inspired by ancient Indian beauty rituals. Her formulas depend on ingredients sourced from family farms in Kashmir, including hand-harvested saffron. For her, authenticity is nonnegotiable, and shifting production outside India is not realistic.

“It’s the knowledge, the resources that they have there, the machinery, the process, the proximity to the ingredients,” Ranavat said.

The Trump administration has advocated for tariffs as a way to push companies to manufacture in the U.S. Ranavat noted, though, that she operates a team in California that handles quality checks, filling and overhead. If costs continue to rise, she would have to cut those U.S. jobs first.

“People think that this is all like a tax on the country, so India is going to suffer. But … it’s the American consumer that’s footing the bill,” Ranavat said.

“Having a blanket statement around being able to move things here doesn’t apply when we want to experience other cultures authentically,” Ranavat said, adding: “That difference is going to be borne by the consumer at the end of the day, or it may make some of these businesses that are rooted in culture and tradition less attractive.”

Viral and Avani Modi Sarkar, siblings who co-founded Modi Toys in 2018, face similar uncertainty. Their company, which sells culturally significant toys, books and gifts rooted in Hindu faith and South Asian culture, is relying on existing inventory while it operates in “wait and see mode.”

Viral Modi told NBC News the impact of the tariffs has been “severe,” especially as the holiday season, the company’s main revenue driver, approaches.

“The unpredictability of tariff rates makes planning nearly impossible,” Modi said.

Satyajit Hange, who co-founded Two Brothers Organic Farms, an organic farm and clean food startup selling traditional food products, sweeteners, snacks and spices to the Indian diaspora, says the tariffs have disrupted demand. The farm, which started with 32 acres, now works with more than 3,000 farmers across 4,500 acres in India.

U.S. consumers account for about 15% to 20% of Hange’s revenue, but the tariffs have discouraged many from buying.

“There is a 70% to 80% fall in demand right now, because I think even people have stocked up, and we are seeing that the carts at checkouts are being dropped by consumers, because that is where the tariffs get applied,” Hange said.

Like the others, Hange stresses that replicating his products in the U.S. is impossible.

“We’re catering to mainly Indians out there who have eaten this kind of food for generations. So they have no other alternative,” Hange said, adding: “This food gives them a sense of nostalgia, a connection to their tradition, culture. And sadly, they will be missing it if they can’t afford it.”

This article was originally published on NBCNews.com