Survival and Spice: How Soaring Tariffs Are Squeezing the Soul Out of Indian American Businesses 

The Trump administration’s imposition of 50% tariffs on imports from India, a punishment for its purchase of Russian oil, is having severe and unintended consequences for Indian American small businesses and the diaspora community they serve. Rather than achieving its geopolitical aims, the policy is forcing difficult decisions about pricing, staffing, and survival for owners of restaurants, boutiques, and cultural product shops who rely on authentic, often handcrafted goods from India.

Business owners report skyrocketing costs, plummeting demand, and the impossible choice of raising prices or absorbing unsustainable losses. Crucially, they argue that their products—be it specific spices, hand-embroidered bridal wear, or traditional foods—cannot be authentically replicated in the U.S., meaning the tariffs ultimately tax American consumers and jeopardize U.S.-based jobs while severing a vital cultural and nostalgic connection for the Indian community. The tariffs are widely perceived as a blunt instrument that protects no U.S. industry while threatening to erase the unique cultural enterprises that form the backbone of many “Little India” neighborhoods across the country.

Survival and Spice: How Soaring Tariffs Are Squeezing the Soul Out of Indian American Businesses 

In the fragrant, steam-filled kitchen of All India Cafe in Southern California, a family’s three-decade-old American dream is simmering under the pressure of a geopolitical storm. Owner Pawandeep Kaur Khinda isn’t just calculating the cost of lentils and spices; she’s calculating survival. A recent presidential decision to slap 50% tariffs on imports from India, a punitive measure for its dealings with Russia, has sent shockwaves through the very foundations of her business and countless others like it across the United States. 

This isn’t a story about abstract trade deficits or diplomatic squabbles. It’s a human story about culture, community, and the crushing weight of policy on the small business owners who stitch the vibrant tapestry of America’s diaspora communities. For them, these tariffs aren’t a negotiating tactic; they are an existential threat forcing impossible choices: raise prices and risk alienating their community, absorb crippling costs, or shutter the doors on a legacy. 

The Geopolitical Trigger: A Trade War’s Unintended Casualties 

The Trump administration’s move to double tariffs on Indian imports to 50% was framed as a direct response to India’s continued purchases of Russian oil, which the U.S. argues financially supports Vladimir Putin’s war in Ukraine. The Indian government decried the move as “unfair, unjustified, and unreasonable,” and the timing was particularly stark—coming just days before a notable trilateral meeting between the leaders of India, Russia, and China. 

While analysts debate the long-term strategic implications, the immediate economic consequences are brutally clear for Indian American entrepreneurs. The U.S. is India’s single largest export partner, with goods totaling $87 billion in 2024. Though massive sectors like pharmaceuticals and electronics were granted exemptions, the tariffs squarely hit the heart of cultural commerce: handicrafts, textiles, and specialty foods that cannot be replicated elsewhere. 

The Restaurant Owner: “Easier to Survive COVID Than This” 

For Pawandeep Kaur Khinda, the math is simple and devastating. The cost of importing the authentic Indian spices and specialty liquors that define her menu has “almost doubled.” Her parents emigrated from India to open the first All India Cafe in Pasadena in 1996. Now, she faces a trifecta of bad options. 

“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,” she says. Unlike large corporate chains, small family businesses can’t afford to stockpile supplies for a rainy day. They operate on thin margins and deep traditions. 

Khinda’s poignant observation cuts to the core of the issue for many: “It feels like the government wants the bigger fish to stay and the smaller fish to go away.” The thought of closing a location now “does cross her mind,” a heartbreaking consideration for a business that is more than a revenue stream—it’s a repository of family history and cultural connection. 

The Boutique Owner: Paying Tariffs Instead of a Salary 

In Artesia, California’s bustling “Little India” neighborhood, the vibrant storefronts of sari boutiques are facing a silent crisis. Heeral Mehta of Sari Palace recently paid a staggering $62,000 in tariffs on a single shipment of 200 bridal outfits. The financial bleed is so severe that she has stopped paying herself. 

“I haven’t paid myself all year because it’s all gone toward tariffs,” Mehta reveals. Her business, built on the intricate, hand-embroidered craftsmanship of Indian artisans, faces an impossible reality. This artistry is a generational skill, a deep-rooted cultural craft that cannot be picked up and moved to a factory in another country. 

Mehta also points out a painful irony in the tariff strategy: “If store owners are going to start increasing their prices, people are going to start going to India to shop. So it’s actually doing the reverse of what this is meant to do.” Rather than incentivizing U.S. production, it incentivizes consumers to bypass American businesses entirely. 

The Ripple Effect: From California Storefronts to Indian Mills 

The pain is not confined to American soil. It reverberates directly back to the source. Sumeer Kaur, founder of the clothing company Lashkaraa, employs 600 people in India. She launched her business at 19 with $1,200 and built it over 11 years. Now, she wakes up each morning hoping for news of a trade agreement. 

In Surat, known as India’s “textile capital,” the consequences are already visible. Kaur reports that local mills are running at half capacity during what should be their busiest season. “It’s very dead,” she says. “And I feel like, in some ways, it’s even more dead than COVID right now.” 

Kaur also dismantles the argument that tariffs benefit the U.S. treasury at no domestic cost. “We’re registered in the United States. We’re paying taxes in the United States… If our revenue is getting less, then so are our taxes,” she argues. “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.” 

Authenticity vs. Economics: The Non-Negotiable Ingredient 

For many of these businesses, “moving production to the U.S.” is not a realistic solution because their product is intrinsically tied to its origin. 

Michelle Ranavat’s eponymous skincare brand, Ranavat, is inspired by ancient Indian beauty rituals. Her formulas depend on ingredients like hand-harvested saffron from family farms in Kashmir. “It’s the knowledge, the resources that they have there, the machinery, the process, the proximity to the ingredients,” she explains. For her, authenticity is nonnegotiable. 

She also highlights another flawed assumption: that tariffs automatically bring jobs back to the U.S. Ranavat employs a team in California for quality control, filling, and management. If forced to cut costs due to tariffs, she says she would have to cut those very American 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.” 

The Cultural Cost: More Than Just a Product 

At its heart, this crisis is about more than economics; it’s about cultural preservation. The products at risk are not mere commodities; they are vessels of tradition, memory, and identity for the Indian diaspora. 

Satyajit Hange of Two Brothers Organic Farms explains that his products—traditional foods, sweeteners, and spices—cater to Indians abroad seeking a taste of home. “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,” he says. Since the tariffs, he’s seen a 70-80% drop in U.S. demand, as shoppers abandon online carts when the tariff cost is applied at checkout. 

Similarly, Viral and Avani Modi Sarkar, founders of Modi Toys, sell culturally significant toys and books rooted in Hindu faith. They are now in a stressful “wait and see mode,” reliant on existing inventory as the crucial holiday season approaches. The unpredictability, they say, makes planning nearly impossible. 

A Path Forward? 

The stories from Southern California’s restaurants and boutiques reveal a stark truth: broad-stroke tariff policies often fail to distinguish between multinational corporations and family-run cultural enterprises. They risk extinguishing the very small businesses that contribute unique diversity to the American marketplace and provide a vital economic and cultural lifeline to immigrant communities. 

As these owners grapple with impossible decisions, they underscore a fundamental question: In a globalized world, can trade policy be wielded as a blunt instrument without damaging the intricate, human connections that bind communities together? For now, business owners like Pawandeep Kaur Khinda continue their calculations, hoping their recipes for success can withstand a challenge far greater than any they’ve faced before.