Tariffs Reshape India’s Playbook, Apple Partners Jio, and Nazara Technologies' UK Play

Yesterday, the morning of August 27, 2025, may go down as one of those defining inflection points in India’s economic history. On this day, the U.S. imposed an additional 25% tariff on Indian goods, doubling the levy to 50% for over half of India’s exports to its largest market. Within hours, Tirupur’s garment factories went silent, Surat’s diamond polishers suspended shipments, and exporters in Noida braced for cancellations. For startups, this wasn’t a policy headline - it was an existential shock.

The numbers are staggering. About $48 billion worth of shipments, spanning textiles, gems, handicrafts, leather, and shrimp, now face a pricing disadvantage of 30-35% in the U.S. market. A $10 shirt made in Tirupur will now retail for $16.40 in America, while a Bangladeshi shirt sells for $13.20 and a Vietnamese one for $12. The Federation of Indian Export Organisations estimates that in some categories, exports could plunge by as much as 70%, jeopardizing hundreds of thousands of jobs.

India does have levers to soften the blow and even turn this disruption into opportunity. One path is to deepen exports to existing FTA partners: the newly inked UK deal opens up tariff-free access in sectors like textiles, auto components, and food processing, while the India-UAE CEPA has already boosted exports by nearly $24 billion in 2024. Another is to stitch new agreements, like the EFTA trade pact that comes with a binding $100 billion investment commitment, or the recently concluded Oman CEPA, which makes Duqm a strategic gateway to both the GCC and potentially the U.S. via the Oman-U.S. FTA. And finally, India can leverage re-routing strategies by setting up finishing hubs in FTA countries such as Oman, Singapore, or Mauritius to qualify under Rules-of-Origin and bypass steep tariff walls. Combined with the BRICS expansion that creates new pathways into Africa and West Asia, these moves suggest that India isn’t just reacting to tariffs - it is recalibrating its trade architecture to hedge risks, diversify markets, and build a stronger base for domestic manufacturing.

And yet, hidden in this brutal tariff shock lies an opportunity - perhaps the strongest push India has had in decades to finally build a resilient domestic manufacturing base. Unlike the knee-jerk fear after the 1991 balance-of-payments crisis or the COVID-19 pandemic, this time the response is rooted in structural change. The government has already rolled out a ₹25,000 crore Export Promotion Mission, GST simplification that could unlock ₹5.3 lakh crore in domestic consumption, and a Make in India 2.0 program focusing on semiconductors, 5G/6G, and defense.

For startups, this pivot is no longer optional. The old playbook - build for exports, scale via U.S. contracts, flip domicile to Delaware - now looks fragile. Instead, venture capitalists are rewriting their investment thesis around “Yuva Bharat,” a demographic dividend where 50% of the population is under 25. Consumption-led D2C brands like Snitch and Bewakoof, craft-tech platforms like Weavehand, and fintechs enabling MSME credit are all better hedges against tariff shocks than export-heavy models. Investors, too, are responding. Family offices - less obsessed with 10x exits - are stepping in with patient capital for deep-tech and manufacturing startups, while public markets, not private funds, provided over ₹44,000 crore to startups in FY25.

The historical parallels are striking. The U.S.-China trade war of 2018 saw Beijing pivot inward with its “Dual Circulation” strategy while simultaneously diversifying through Vietnam and Bangladesh. India cannot copy that model. It must build not just as an “India+1” to someone else’s supply chain, but as a true Atmanirbhar Bharat - where value chains from design to finished goods are anchored domestically. The PLI scheme has already attracted ₹1.76 lakh crore in investments and generated over 12 lakh jobs, showing that policy incentives can align with startup agility.

But let’s not understate the risk. Competitors like Vietnam have free trade deals and higher productivity, while Bangladesh remains cheaper. India sits in an uncomfortable middle: costlier than Bangladesh, less efficient than China. Startups cannot win this game on labor arbitrage alone. They will need to innovate — whether through AI-driven supply chains, blockchain-led traceability, or zero-inventory craft-tech models — to justify premium pricing.

We think the road ahead is messy but clear. In the near term, we will see pain: layoffs in labor-intensive sectors, delayed IPOs, renegotiated valuations. But the long-term vision is compelling. If India can turn this tariff war into a springboard for industrial renewal, the country may finally move from being price-competitive to innovation-competitive. Startups that today lament tariffs could, five years from now, look back at this as the crucible that forged their resilience.

The lesson is blunt: overdependence on a single market is no business model, and cheap labor is no lasting advantage. If the funding winter forced Indian startups to chase profitability, this tariff war may force them to build domestic manufacturing muscle.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Never Gonna Let You Go”: Apple Partners Jio To Bring RCS Messaging To iPhones In India

iPhone users on Jio are in for an upgrade, Apple is finally rolling out RCS messaging support in India. Think of it as SMS 2.0, with safer, richer features for chats, alerts, and OTPs.

With India still hooked on old-school texts for banking and transactions, this move could fast-track the country into a smarter messaging era.

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“Kaafi Phaila Hua Business Hai”: Nazara Technologies' 3 subsidiaries extend loans worth Rs 18 Cr to UK arm

Nazara Technologies is powering up its UK play, three of its subsidiaries have together extended loans worth nearly ₹18 crore to the London arm.

The funds will fuel working capital needs and expansion moves overseas. With disbursements planned in tranches, Nazara seems set on levelling up its global gaming footprint.

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“Kuch Na Kuch Karna Padega”: BNP Paribas Buys Eternal Shares Worth INR 3,200 Cr, Offloads Stake In Swiggy

BNP Paribas is reshuffling its India bets, scooping up Eternal shares worth a massive ₹3,200 Cr while cashing out ₹1,158 Cr from Swiggy.

Interestingly, this comes just weeks after the bank had topped up its Swiggy stake. Looks like BNP is playing a careful balancing act between steady picks and high-growth gambles.

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“Apne Risk Par Invest Kare”: Delhi Govt proposes Rs 200 Cr VC fund under draft startup policy 2025

Delhi wants to put itself on the startup map in style, the new draft Startup Policy 2025 proposes a ₹200 Cr VC fund for early-stage ventures. The fund will mix equity and debt while pulling in private co-investors to multiply impact.

Sweetening the deal are perks like free coworking rent, patent support, and even a ₹2 lakh monthly allowance for young startups finding their feet.

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1. Maths-meets-gaming startup Matiks has bagged $3.14 Mn in a pre-Series A led by Tanglin Ventures, with backing from big names like Aman Gupta and Gaurav Munjal. The fresh funds will help it grow the team, scale offerings, and take its math-based gaming platform global.
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