New York–based designer Devika Jadhav, founder of Amaya World, an ethical slow-fashion brand, faced an unexpected cost overrun this summer.
When a shipment of Amaya’s summer collection arrived at U.S. customs, Jadhav thought she had accounted for every expense. Her label runs on tight margins, and she had carefully budgeted for duties, shipping, and freight on her boxes of hand-embroidered jackets and block-printed dresses.
But a paperwork change at the border upended her plan. The shipment was reclassified under a different Harmonized System (HS) code — the global standard for categorizing traded goods. Overnight, her pieces fell into a higher tariff bracket. With only days to act before the goods risked being returned overseas, Jadhav had no choice but to pay the higher duties.
“It was an unplanned cost that significantly impacted our margins,” she said. “Unpredictable tariffs and shifting import policies affect how we plan pricing, shipments, and inventory. As a small brand manufacturing in India and shipping to the U.S., even minor changes in tariff categorization or fees can throw off timelines and margins.”
Jadhav’s experience is hardly unique. Under the Trump administration’s “reciprocal tariff” policy, the U.S. has raised duties on imported textiles and apparel, hitting countries such as China, Vietnam, and India the hardest. Average tariff rates have climbed above 23 percent, creating new headwinds for independent sustainable labels.
As consumer demand grows for responsible fashion, brands like Amaya World find themselves navigating not just creative challenges but also volatile trade policies that threaten the very sustainability they champion.
Policy volatility meets small business fragility
Retaliatory duties and shifting trade rules have touched nearly every consumer sector, from steel to semiconductors. But for smaller, ethically driven fashion labels, the stakes are particularly high — both morally and operationally.
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Many U.S.-based responsible brands rely on apparel crafted by Indian karigars, artisans whose skills and artistry are central to their identity. Rising tariffs on Indian imports, however, affect more than just the bottom line. They undercut the very philosophy of these labels: to offer a conscious fusion of East and West while spotlighting the exceptional quality of Indian fabrics and craftsmanship.
Megha Rao, founder of NYC-based South Asian–inspired label holiCHIC — a brand consistently worn by A-listers and celebrities — explained the ethos behind her work. “holiCHIC came out of my personal story being born and raised as an Indian-American daughter of immigrants in NYC. Growing up, I loved the richness of Indian textiles and fashion but I didn’t see them in clothing that felt modern or relatable here. I started designing pieces that blended both worlds. It’s always been about more than clothes, it’s about celebrating heritage while making it universal and accessible to everyone.”
For small labels committed to responsible consumption, the already higher costs of artisanal products collide with shrinking margins. On the biggest logistical and financial challenges brands face with imports and tariffs, Rao added: “In India, artisans take the time to perfect their craft, but in the U.S. market, deadlines are everything for our buyers, retailers, and most importantly, consumers. Marrying those two worlds has be tough. I’m designing for a U.S. customer who is driven by trends and instant gratification, while working with traditional processes that can’t be rushed. Add to that the cost of tariffs and imports, and it becomes a constant balancing act of running a healthy business, while staying true to the craft, and meeting the fast pace of American retail.”
What many consumers may not realize is that tariffs don’t just affect trade statistics; they directly shape how independent, values-driven brands survive in the marketplace. As Devika Jadhav of Amaya explained: “The tariff duties on clothing reach up to 22%, and for a small brand like ours, that significantly affects our margins. Unlike larger companies, we don’t produce at scale or cut costs with blends or synthetic linings—we stand by every detail, from our 100% natural fabrics to our fair-wage production practices. So, we have to absorb the extra cost or find ways to build it into our pricing, all while trying to keep our pieces accessible to a broad customer base.”
Tariffs, trade law and immigration considerations
According to legal experts, the irony is that the very businesses upholding sustainability and fair trade often face the steepest hurdles. Data from the U.S. Census Bureau shows that in 2023, about 242,515 businesses imported goods into the U.S., and 97% of them were small businesses.
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A recent Small Business Index survey, conducted by the U.S. Chamber of Commerce for Q2 2025, found that 70% of small businesses reported paying higher prices for the goods and services they buy.
Experts note that while tariffs are usually discussed in the context of trade law, their impact often reaches into other areas of business strategy. Attorneys point out that for small U.S. brands importing sustainable textiles from India, immigration considerations can also come into play, particularly in today’s climate of heightened scrutiny. For example, questions arise around visa rules when artisans or suppliers need to travel for short-term meetings or quality inspections.
Immigration attorney Poonam Gupta of Summit Legal LLC explained: “B-1 Business Visitor visas are available for Indian artisans and suppliers conducting short-term business meetings, quality inspections, or training. Other visa categories such as L-1 Intracompany Transfer visas may only be available to larger corporations, who are looking at improving their competitive positioning. While small importers often need on-ground expertise to navigate supply chain disruptions and may leverage O-1 visas for specialized professionals.”
Legal experts caution that any restructuring to offset tariff costs must be approached carefully. As Gupta noted: “Compliance considerations are important. Businesses restructuring to mitigate tariff impacts must ensure any new corporate structures don’t inadvertently affect existing immigration sponsorships or create complications for future visa applications.”
Beyond compliance, the pressures can be personal. Gupta added: “Many sustainable fashion entrepreneurs are themselves immigrants or first-generation Americans with cultural connections to Indian textile traditions. Tariff pressures may influence decisions about global mobility, family reunification timelines, or naturalization planning.”
Creativity and resilience to beat the odds
While policymakers often frame tariffs as a way to protect American jobs, the reality on the ground is more complicated. Independent sustainable brands are not typically competing with domestic textile mills; instead, they find themselves up against fast-fashion multinationals that can more easily absorb duties.
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Even as higher tariffs tighten margins, designers are responding with resilience and creativity. Jadhav says, “We’ve made a clear choice to use 100% natural fabrics and work with artisans who are paid fairly. So, we find balance in other ways like producing small batches, staying lean with overhead, and connecting directly with our customers to avoid intermediaries. To further recover the cost of fabric waste from clothing production, we are launching bags made of those leftover fabrics.”
She adds, “We are finding ways to absorb the increased import costs by optimizing our production and logistics processes. Another approach we take is by being transparent about our pricing — for example, by explaining how our embroidered jacket takes 30 hours of intricate work to finish. It’s not always the easiest route, but builds long-term trust.”
Labels like holiCHIC are also drawing on lessons learned from past challenges. Rao says, “Tariffs and policy shifts have created a lot of unpredictability, but I look at it as part of doing business. Every challenge is an opportunity to problem solve, learn and create better processes. We went through the same thing during COVID, navigating delays, diversifying our product mix, learning as we went, and ultimately coming out stronger. Right now, we’re simplifying processes, streamlining production, and embracing a ‘less is more’ approach to make sure we stay nimble.”
True to their responsible fashion ethos, brands are also working to retain customer trust by avoiding price hikes. Jadhav says, “This season, we’ve absorbed many of these cost fluctuations by reducing our margins.” Rao echoes the same philosophy: “We will do everything in our control not to pass those extra costs down to customers. With rising tariffs, buying directly from India or smaller brands can mean higher costs for consumers, but with our experience, tenure in the industry and infrastructure we feel we can offer the same craftsmanship at fair, consistent prices.”