‘$3 Billion, 10 Million Jobs at Risk’: Trump’s Tariffs To Hit Indian Industries

Sectors such as textiles, apparel, footwear, gems and jewellery, which primarily export to the US, will be hit hard.

In this story, The Quint uncovers the impact of Donald Trump's tariffs on the billings of big manufacturers and exporters as well as the jobs and livelihood of millions employed by them.

(Image: The Quint/@Aroop Mishra)

US President Donald Trump's recent announcement of levying additional 25 percent tariffs on Indian imports, citing New Delhi’s continued purchase of Russian oil, is set to deliver a severe blow to key industries in India.  

The additional 25 percent tax, which is effective 21 days after Trump’s announcement on Wednesday, 6 August, will total the import tariff on certain Indian goods to as high as 50 percent.   

Sectors such as textiles, apparel, footwear, gems and jewellery, which primarily export to the US markets, will be hit by these announcements.

Experts from the textile industry, which employs more than 45 million workers, told The Quint that the sector is staring at losses worth billions of dollars and disruption of millions of jobs if Trump doesn’t immediately withdraw the additional tax.

Besides, relatively lower tariffs for India’s main competitors like Bangladesh and Vietnam has led to added pressure on the industry. 

Meanwhile the jewellery manufacturers in Surat, Gujarat seemed to be relatively resilient, having purportedly pivoted to markets other than the US in the last six months.  

In this story, The Quint uncovers the impact of Trump's tariffs on the billings of big manufacturers and exporters as well as the jobs and livelihood of millions employed by them. 

'Set to Lose $2.5-3 Billion If Additional Levy Not Removed'

“The tariffs are a very, very deep blow to the textile sector. The US is the single-largest market for India's textile and apparel exports. Around 28 percent of India's total textile and apparel exports go to the US,” said Chandrima Chatterjee, General Secretary, Confederation of Indian Textile Industry (CITI). 

In financial year 2024-25, textiles and apparel worth $10.8 billion were exported to the US from India. But exports to the US in June have already started witnessing a notable slowdown, CITI stated in a press release.  

“Our biggest problem right now is the uncertainty. It is creating pressure to renegotiate terms with existing buyers. We are facing order cancellations while being left in a wait-and-watch mode,” Chatterjee told The Quint.  

Sudhir Sekhri, Chairman of the Apparel Export Promotion Council (AEPC), concurred that the sector will incur heavy monetary losses on orders that were work in progress. He explained:

“Orders that were cut and ready for shipment have been stalled as have orders that were at the production stage. Again, materials had been procured for orders that were supposed to be shipped between October and December. But now they have been cancelled due to the additional 25 percent tariff, making the cost of fabric a liability.” 

For the apparel industry, the spring-summer months are the busiest time, attracting the sector’s biggest orders. “But not this time. Even buyers who were at the verge of finalising orders have not gone ahead with them,” Sekhri told The Quint.    

He stated that apparel worth $5.2 billion was exported to the US in the last financial year and that worth $1.6 billion was exported in the first five months of this year.  

“But if the additional levy is not removed, we set to lose $2.5-3 billion worth of business in orders,” Sekhri claimed. 

10 Million Jobs in Danger in Textile, MSMEs, Ancillary Industries

Stalled deliveries, cancelled orders, and loss of business would directly mean factories running idle, affecting the livelihood of millions employed in the textile and apparel sector.

“Micro, Small and Medium Enterprise (MSME) manufacturers, which don’t have a financial reserve for the next 4-5 months, will shut down. Large exporters, which have some financial buffer but export 90-95 percent of the orders to the US, will shut down too,” Sekhri posited.

A lot of ancillary industries—such as laces, embellishments, labels, polybags, cartons, elastic, thread, process houses—which are dependent on these manufacturers and exporters will also see disruption of jobs. Of the 45 million employed in the textile industry:

• ~14.5 million have jobs directly linked to textile,

• ~29 million are employed in ancillary jobs

“At least 25 percent (over 10 million) of these jobs are in danger because of the tariffs,” Sekhri asserted.

Meanwhile, Chatterjee said that though it is difficult to assess job losses at this point, those directly engaged in textile exports will certainly be hit.

“In terms of both production and employment, nearly 75 percent of the textile industry caters to the domestic market, while 25 percent is set aside for exports. So, a domestic apparel manufacturer won’t be affected but a fabric manufacturer (who supplies to exporters) will be affected by the tariffs,” she explained.

The decision is set to have an impact on everyone—percolating from the largest players in the supply chain to the smallest; from manufacturers to yarn spinners, yard dyers, printers and even the farmers. However, it may be easier for the smaller players to diversify to markets other than the US.

'Surat's Gems & Jewellery Manufacturers Better Prepared, Started Shifting to Markers Other Than US'

Amit Korat, President of the Surat Jewellery Manufacturers’ Association, told The Quint that jewellery manufacturers in India’s largest hub had started exploring other markets for exports almost six months ago, when Trump took office as the US President for the second term.

“Diamond merchants, who were earlier exporting at a zero percent levy, were mentally prepared for tariffs to the tune of 10 percent. So, they cleared out the export inventory over the last 90 days. Currently our books are clear,” Korat claimed. On the additional 25 percent tariff, he said, “We don’t even know if it’s here to stay.”

This pre-emptive strategy added to the upcoming festive season—when the demand of jewellery is high in domestic markets—will purportedly allow jewellery manufacturers and exporters to cushion the aftershocks of Trump’s tariffs.

The gem and jewellery sector did trade worth of roughly $80 billion last year. Of this, $35 billion was from exports, where the share of exports to the US was nearly $10 billion. The remaining was from the domestic market.

“Exports to the US can either be absorbed by the domestic market or by other international markets, such as the Middle East, Europe, Australia or Japan. Although their market share is lesser than that of the US, these markets are untapped and offer potential for growth,” Korat explained.

When asked about the direct impact of these tariffs on employment, Korat argued that it will be “short-termed” and will affect a small subset of exporters who primarily sell to the US.

Meanwhile, the Gem and Jewellery Export Promotion Council (GJEPC), in a press statement, said that that SEEPZ Special Economic Zone, which provides 50,000 jobs, directs 85 percent of the exports to the US. “With the revised tariff, the entire industry may come to a standstill, placing immense pressure on every part of the value chain—from small karigars to large manufacturers,” the statement read.

'Tariffs a Wake Up Call for Overdependence on One Market'

“If the 50 percent tariff is not immediately reduced to 25 percent, then all the future buyers will move outside India,” Sekhri warned.

The tariffs have served as a wake-up call for over-dependence on one market, pushing sectors to diversify their markets.

“We will, of course, have to look at buyers from other countries including Japan, Europe, and the UK. But a) onboarding new buyers requires time and b) amid the shifting landscape, India must identify and prioritise value-driven markets. For instance, the US is a volume market whereas UK is a more boutique-destination,” Chatterjee explained.

Besides, India’s competitors in the textile market have been awarded significantly lower tariffs—making Indian goods less competitive in the US markets.

Currently, China is the biggest exporter of textiles and apparel items to the US, followed by Vietnam, India, and Bangladesh.

The new tariffs imposed by the US on imports from Bangladesh and Vietnam is 20 percent, while goods imported from Indonesia and Cambodia will now attract a levy of 19 percent each. Similarly, among competing jewellery manufacturing hubs, Türkiye has been awarded a duty of 15 percent, while Thailand 19 percent.

Korat concurred, “There will, of course, be some short-term challenges to diversifying. New markets can’t be explored overnight or even within the next six months. It will take time to show any gains.”

The GJEPC warned that high taxes on Indian imports may lead to the possibility of trade rerouting through low-tariff destinations such as Mexico, Canada, Türkiye, UAE, or Oman—which undermines the spirit of legitimate trade.