The United States has doubled tariffs on Indian exports to 50 percent, creating a storm for India’s micro, small, medium, and large industries. The penalty came into effect on August 27, 2025, after President Donald Trump’s administration slapped an additional 25 percent import duty on India for purchasing oil from Russia. This comes on top of the earlier 25 percent tariff imposed on August 7 to cut America’s trade deficit.
The fallout is nationwide, stretching from Punjab in the north to Tamil Nadu in the south and Gujarat in the west. Several industries—textiles, gems and jewellery, agriculture, leather, carpets, and handlooms—now face severe export losses. The impact is not immediate but is expected to intensify over the long term, threatening jobs, livelihoods, and India’s export competitiveness in the US market.
Gems and Jewellery Exports Crippled
India exported $10 billion worth of gems and jewellery to the US in FY 2024-25, holding a 40 percent global market share. Before August, the US tariff on these products was just 2.1 percent. Now, the rate has skyrocketed to 52.1 percent.
The fallout is especially severe in:
Surat, Gujarat – The world-famous “Diamond City” where lakhs are employed in cutting and polishing.
Mumbai, Maharashtra – A hub for global jewellery trading.
Jaipur, Rajasthan – Renowned for precious stone cutting and jewellery craftsmanship.
Industry experts warn that over one lakh jobs may be at risk, as competitors like Thailand, Turkey, and China become more cost-effective for American buyers.
Textile Industry Faces a Blow
The US accounts for 28 percent of India’s textile exports, worth more than $10.3 billion annually. Until recently, Washington imposed 9 to 13 percent tariffs. With the new penalty, the rate has surged to over 63 percent.
The hardest-hit centers include:
Tirupur, Tamil Nadu – The “Knitwear Capital of India.”
Noida, Uttar Pradesh – A major apparel export hub.
Gurugram, Haryana – Known for textile and garment clusters.
Bangalore, Karnataka – Major exporter of ready-made garments.
Ludhiana, Punjab – Specializes in woolens and hosiery.
Jaipur, Rajasthan – Famous for hand-block printed fabrics.
Competing countries like Vietnam, Bangladesh, Indonesia, and Cambodia, which face tariffs in the 20 percent range, are set to benefit, eating into India’s market share.
Agricultural and Marine Products Hit Hard
India exports more than $5.6 billion worth of agricultural products annually to the US, including:
Marine products (shrimp, fish, seafood)
Rice and edible oils
Spices and herbal products (AYUSH)
Sugar, dairy, fruits, and vegetables
The seafood industry is expected to take the hardest hit. Low-tariff competitors like Thailand, Vietnam, Pakistan, Kenya, and Sri Lanka will now flood the US market with cheaper products.
States affected:
West Bengal – Shrimp exports from North & South 24 Parganas and East Medinipur districts.
Punjab, UP, and Maharashtra – Exports of rice, vegetables, and dairy.
Kerala and Karnataka – Marine products and spices.
Industry insiders fear 10,000 jobs in seafood processing units alone could be lost, with ripple effects on farm-level employment.
Leather and Footwear Industry at Risk
India exports $1.18 billion worth of leather and footwear to the US annually. Now, a 50 percent tariff hike may redirect business to Vietnam, Indonesia, China, and Mexico.
Major clusters under stress:
Kanpur & Agra (Uttar Pradesh) – Known as India’s leather hub.
Ambur-Ranipet (Tamil Nadu) – Houses some of the country’s largest tanneries and footwear factories.
Kolkata (West Bengal) – The Bantala leather hub employs nearly 500,000 workers.
Industry representatives warn that lakhs of jobs are now vulnerable as export orders are drying up.
Carpet Exports Collapse
India exported $1.2 billion worth of carpets to the US in FY 2024-25, commanding 60 percent of the American market. Previously taxed at 2.9 percent, tariffs have jumped to 53 percent.
Export centers under distress:
Bhadohi & Mirzapur (Uttar Pradesh) – Known as the “Carpet City of India.”
Srinagar (Jammu and Kashmir) – Famous for Kashmiri hand-knotted carpets.
The Carpet Export Promotion Council (CEPC) reports export orders worth ₹1,500 crore stalled in just 40 days, threatening 30 lakh jobs in UP’s carpet belt. Competitors like Turkey, Pakistan, Nepal, and China are poised to capture this lucrative market.
Handloom Industry Suffers
India exported $1.6 billion worth of handloom products to the US last year, commanding 40 percent of the total American import share. With tariffs surging above 50 percent, handloom clusters are under immense strain.
Key centers impacted:
Jodhpur & Jaipur (Rajasthan) – Renowned for artisanal fabrics.
Moradabad & Saharanpur (Uttar Pradesh) – Known for handloom and handicrafts.
Exporters warn of factory shutdowns as orders shift to China, Turkey, and Mexico, where tariffs are much lower.
State-Wise Impact Across India
Punjab
Exports worth ₹20,000 crore across textiles, garments, machine tools, sports goods, and agriculture face direct tariff pressure. Ludhiana’s textile exports are particularly at risk.
Uttar Pradesh
Kanpur leather industry: Export orders worth ₹1,500 crore stalled.
Bhadohi-Mirzapur carpets: ₹6,000 crore business under threat.
Employment hit: 30 lakh workers’ livelihoods at stake.
Haryana
Basmati rice exports face challenges with an additional 25 percent tariff.
Panipat textiles: Exports worth ₹20,000 crore, half of which goes to the US, under pressure.
Rohtak nut-bolt industry: 70 percent exports to US, orders down drastically.
Gujarat
Surat’s diamond industry is the hardest hit, with export orders drying up.
Job losses could exceed 100,000 workers in gems and jewellery.
West Bengal
Seafood exports: Out of ₹8,000 crore exports, ₹5,000–₹6,000 crore directly impacted.
Bantala leather hub (Kolkata): Nearly 500,000 workers employed, 20 percent of exports linked to US.
The Bigger Picture: What’s at Stake for India?
The US tariffs are reshaping India’s trade landscape. The textile, gems, jewellery, and carpet industries—which rely heavily on American buyers—face an existential crisis.
Exports worth billions are under threat.
Jobs for millions of workers across states like UP, Punjab, Gujarat, Tamil Nadu, and West Bengal hang in the balance.
Competing countries with lower tariffs stand to capture India’s market share in the US.
Unless India diversifies its export markets or negotiates relief, the long-term impact could cripple key sectors of the economy.
Conclusion
The US’s 50 percent tariff wall is more than just a trade measure—it is a severe economic challenge for India. Industries from Surat’s diamond cutters to Bhadohi’s carpet weavers, from Kanpur’s leather hubs to Tirupur’s textile factories, are bracing for heavy losses.
With exports drying up and jobs on the line, the coming months will be crucial. India must now either find new markets, negotiate trade relief, or boost domestic demand to shield millions of livelihoods from the impact of America’s tariff hammer.
