New Delhi, India – India’s exporters are grappling with uncertainty after the United States imposed a 50 percent tariff on Indian goods, a move that industry leaders warn could trigger widespread job losses and erode the country’s export competitiveness.
The tariff increase, which took effect on Wednesday, has affected several of India’s most prominent export sectors, including textiles, gems, jewellery, carpets, and seafood. These industries, which collectively employ millions of workers, now face shrinking margins and reduced demand from their largest overseas market.
Exporters Under Pressure
For Anuj Gupta, who runs a garment accessories business in Delhi, the impact has been immediate. Gupta, whose products like laces and buttons are supplied to international fashion brands, said the tariff hike has left a “big dent” in his operations. About 40 percent of his business depends on the US market. “The uncertainty has hampered the work badly,” he said, adding that global buyers may soon turn to competing markets such as Vietnam, Bangladesh, and China if the dispute lingers.
The fashion industry typically operates years in advance, with current production cycles focused on autumn 2026. Exporters fear that continued trade frictions could undermine their long-term contracts with global brands.
Government Response and Industry Appeals
In response to growing concerns, the Federation of Indian Export Organisation (FIEO), a government-backed body representing exporters, has engaged with Indian officials to seek relief measures. Ajay Sahai, FIEO’s CEO, said Finance Minister Nirmala Sitharaman has assured exporters of government support, which could include targeted financial packages to offset losses. “The government has asked us to prepare a report, and then they will come up with a scheme,” Sahai said. “There is an assurance that layoffs will be avoided – though implementation will be challenging.”
Seafood Industry on Edge
Among the sectors most exposed is seafood, particularly shrimp, which accounts for more than 90 percent of India’s $7.38 billion seafood exports. The US absorbs over 40 percent of India’s shrimp shipments.
K Anand Kumar, managing director of Sandhya Marines in Andhra Pradesh, said the tariff hike has pushed his company, which employs 3,500 workers, to the brink. “We are already laying off because we cannot keep paying salaries with no orders in line,” he said. “The small farmers, who peel the shrimp, will be worst affected because there is no work now to employ them.”
Industry associations estimate that nearly two million people are directly or indirectly linked to shrimp exports nationwide. Kumar predicts that more than half could lose their livelihoods if tariffs remain in place.
Textile Hub Feels the Pinch
In Tiruppur, Tamil Nadu – often referred to as the “Dollar City” for its thriving garment exports – anxiety is mounting. The town accounts for nearly a third of India’s $16 billion ready-made garment exports and supplies global brands such as Zara and Gap.
“Wherever margins are lower, the production has been halted altogether,” said V Elangovan, managing director of SNQS International Group, which employs 1,500 workers. He estimated that as many as 150,000 workers in Tiruppur could be at risk of losing their jobs. “Customer diversification is not like a switch we can turn on and off. Soon, we will be looking at cash flow issues, and there will be a lot of retrenchment.”
Broader Economic Concerns
The tariff shock threatens not only individual exporters but also India’s broader economic ambitions. Moody’s Ratings has warned that prolonged tariffs could slow India’s economic growth and undermine efforts to position itself as a global manufacturing hub. Beyond 2025, the agency cautioned, the tariff disparity with other Asia-Pacific economies could discourage foreign investment and reverse gains made in recent years.
Exporters say the unpredictability is particularly damaging. “It is like being in a nightmare where you do not know what new tariff number you wake up to next,” Kumar said.
Calls for Self-Reliance
Prime Minister Narendra Modi has called for greater economic self-reliance in the face of global protectionism. In his Independence Day address earlier this month, he said: “Economic selfishness is on the rise globally and we mustn’t sit and cry about our difficulties. India will never compromise when it comes to protecting the interests of our farmers.”
However, industry leaders worry that an extended standoff could inflict lasting harm on sectors that have thrived on global demand, particularly from the US. “A 50 percent tariff is practically an embargo on Indian goods,” said Elangovan. “The government is letting us get punched in one eye to save the other.”
Outlook
For now, exporters are waiting to see if negotiations between Washington and New Delhi can ease tensions. Five rounds of talks have failed to yield a breakthrough, raising concerns that customers may permanently shift away from Indian suppliers.
With livelihoods at stake in industries employing millions, the pressure is mounting on policymakers to find a resolution that balances national interests with the urgent needs of businesses and workers.
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