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Trump's Tariffs Cripple India’s Exports – Factories Struggling, Jobs At Risk
Trump's Tariffs Bring India’s Export Industry To Its Knees – Factories Struggling To Survive, Workers Losing Their Jobs
India's textile, jewellery and seafood sectors face severe losses as U.S. tariffs hit hard, pushing factories to the brink and leaving workers jobless.
Surat (Gujarat)/Mumbai (Maharashtra)/Tamil Nadu: Indian manufacturers, especially those in the textile, jewellery and seafood industries, are facing severe disruptions as U.S. President Donald Trump's new tariffs threaten to decimate their businesses. As the 50% duties on Indian goods set to take effect from August 27, factories that supply to major U.S. retailers such as Walmart, Target and Gap are witnessing cancelled orders and reduced production.
Industry leaders are concerned that the impact could last well into the critical pre-holiday season, leaving thousands of workers and businesses in jeopardy. The tariffs are part of a broader trade dispute between India and the U.S., which has been escalating in recent months.
Tamil Nadu's Tirupur, India's largest textile export hub, faces a critical situation. According to a BBC report, showroom displays of new designs gather dust.
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India is a significant exporter to the United States, particularly in textiles, shrimp and jewellery. Industry experts warn that these high tariffs, combined with a 25% penalty on Russian oil imports, could be as damaging as a near-total ban on Indian products.
Tirupur contributes nearly a third of India's $16 billion ready-to-wear garment exports. Brands like Target, Walmart, Gap and Zara rely on products from this region. But with the tariff announcement, many businesses are now grappling with deep concerns about their future.
N Krishnamurthy, who owns a garment manufacturing unit here, shared his anxieties. "After September, we may have nothing left to do. Our customers have cancelled all orders," he told the news outlet.
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His expansion plans were recently halted, and nearly 250 new employees were let go as he faced mounting uncertainty.
Trump's tariffs have been introduced during the critical period leading up to the holiday season. For textile factories, this is prime sales time. The losses are piling up. Factories that relied heavily on U.S. orders now find themselves staring at an uncertain future, hoping that the domestic market and the upcoming Diwali season will provide some respite.
In another factory that produces underwear, there is around $1 million worth of stock for U.S. stores. But the buyers are now absent, leaving Raft Garments' owner Shiva Subramaniam in a tough spot.
"We were hoping for a trade deal between India and the United States, but it never came. Since last month, our entire production chain has come to a halt. If this continues, how will I pay my workers?" he asks.
Trump's tariffs will increase the price of a $10 shirt made in India to $16.4, while a similar shirt from Bangladesh could cost $13.2, and one from China could go for $14.2. Even a T-shirt made in Vietnam may cost around $12.
While the Indian government has announced measures to counteract the impact, such as suspending import duties on raw materials, these efforts may come too late. India has also ramped up talks with other countries to explore new markets, but analysts warn that it may be too little, too late.
Ajay Srivastava of Global Trade Research Initiative pointed out, "American buyers are shifting to countries like Mexico, Vietnam and Bangladesh."
Mumbai's bustling diamond export zones, where workers polish and pack the precious stone for shipping, is also feeling the heat. India is a major exporter of gems and jewellery, but even jewellery brands are now nervous. September and October are critical months when $3-4 billion worth of jewellery is shipped to the United States. But tariffs are threatening that trade, and the industry's future is in jeopardy.
Adil Kotwal, who runs Creation Jewellery, said, "Years of effort to establish a foothold in the American market could be undone in just a few months."
His company exports 90% of its diamond-studded jewellery to the United States, but even a 10% tariff increase could prove disastrous for his business.
Sourcing diamonds from Surat, world's largest diamond-cutting and polishing hub, Kotwal faces a double blow. With global demand falling and rising competition from lab-grown diamonds, the industry is already struggling. The additional tariffs only deepen the crisis.
Factories in Surat are operating at less than half their capacity, with some working only 15 days a month. The number of employees has also shrunk drastically.
Shailesh Mangukia, the owner of a diamond polishing unit in Surat, had to reduce his staff from 300 to just 70, while the number of polished diamonds produced has dropped from 2,000 per month to just 300.
Meanwhile, Indian shrimp farmers, one of the world's largest exporters, are also struggling. The United States has been a key market for shrimp. With tariffs set to rise above 60%, this sector is under threat. Shrimp exporters fear that the price drop seen after the first tariff announcement will continue.
Talking to BBC, Thota Jagdish, a shrimp exporter, said, "This is the busiest time for U.S. customers preparing for Christmas and New Year sales. But we are in a state of confusion. We cannot make any decisions."
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Hatcheries are scaling back production, and the consequences could be severe. An estimated 500,000 shrimp farmers and 2.5 million other workers might lose their livelihoods if this continues.
The trade impasse between India and the United States remains unresolved, and recent efforts to restart negotiations in Delhi have been cancelled. U.S. officials have increased their criticism of India, further complicating the situation.
Gopal Nadur, of the Asia Group consultancy firm, said, "The future of India-U.S. talks now depends on the Trump administration's priorities. The lesson for Indian policymakers is clear: focus on self-reliance and explore new markets with urgency."
As businesses in textiles, jewellery and seafood struggle to adapt, the pressure is mounting for the government to find new avenues for trade and growth. The clock is ticking, and India's exporters are waiting to see whether relief will come in time.
Source: ZeeNews
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