India is reeling from a massive economic blow as new tariffs from the US threaten hundreds of thousands of jobs. From garment factories to shrimp farms, industries are facing unprecedented challenges. Will India’s vital export sectors be able to weather this escalating trade storm?
India’s economy is bracing for significant disruption and widespread job losses due to the recent imposition of substantial tariffs on its goods by the United States. This move, escalating trade tensions, has sent shockwaves through key export-driven sectors, threatening the livelihoods of hundreds of thousands of workers across the nation.
The Trump administration’s decision to double tariffs from 25 percent to 50 percent on Indian products sold in the US follows a period of unresolved trade negotiations between Washington and New Delhi. These elevated duties pose a formidable challenge to Indian exporters, who fear a significant loss of market share as international buyers consider alternative sourcing options.
Analysts and economic observers warn that these protectionist measures could severely impact India’s vital export sectors, which have been significant contributors to the nation’s economic growth. Industries such as textiles, gems, jewelry, carpets, and particularly shrimp, are anticipated to bear the brunt of these increased trade barriers.
The garment manufacturing industry, a major employer, is already feeling the squeeze. Companies like SNQS International Group, which exports garments and employs thousands, are facing halted production in areas with lower profit margins, potentially leading to substantial job losses, with estimates suggesting tens of thousands of jobs at risk in regions like Tiruppur alone.
The shrimp export sector, a highly labor-intensive industry, is in an even more precarious position. India achieved record seafood exports last year, with shrimp contributing a dominant 92 percent of the total value. With the US being the largest importer, accounting for over 40 percent of India’s shrimp shipments, the new trade tariffs directly jeopardize this critical sector.
Industry leaders, such as K Anand Kumar of Sandhya Marines, who employs thousands in coastal Andhra Pradesh, describe the situation as a “nightmare.” His company and others are already initiating layoffs due to a drastic reduction in orders, leaving small farmers and shrimp peelers, who form a crucial part of the supply chain, without work. The ripple effect could impact nearly two million people associated with shrimp exports.
Financial institutions are also assessing the broader economic implications. Moody’s Ratings has indicated that these tariffs could significantly impede India’s economic growth trajectory. Beyond the immediate future, the widening tariff gap could undermine India’s long-term aspirations to expand its manufacturing sector and attract foreign investments.
While some larger brands with higher profit margins might initially weather the storm, a prolonged period of trade hostility is expected to cripple even these businesses. The government has reportedly been asked to prepare a report and scheme to mitigate the impact, with assurances made that layoffs would be avoided, although the reality on the ground suggests otherwise for many.
This economic challenge underscores a global trend towards “economic selfishness,” as noted by Prime Minister Narendra Modi. India’s path forward will likely involve a renewed focus on self-reliance and domestic market strengthening to navigate the complexities of international trade relations and protect its vulnerable workforce.
