India must safeguard its export-oriented industries

The Union government must put forward a coherent policy framework to safeguard India's export sectors, with particular attention to textiles

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As the 50 per cent tariff imposed by the Trump administration in the United States took effect on August 27, 2025, a sense of uncertainty took over India's export-driven industries. Tamil Nadu is one of India's leading states in manufacturing and software sectors, and the US has long been its largest export market. In the last financial year, 31 per cent of Tamil Nadu's merchandise exports were destined for the US, compared with 20 per cent for India as a whole. That deep reliance means any shift in American trade policy hits Tamil Nadu harder than most.

This hike by the US government is unprecedented, and the fear among exporters across sectors is palpable. The steep duty increases are already leading to cancellations of orders. The hikes have made our products uncompetitive globally.

In this difficult context, the response of the Union government has been inadequate. While the Government of Tamil Nadu is stepping up to do all that is within its powers, there are clear limits to what a state government can achieve. We urge the Union to get its act together and put forward a coherent policy framework to safeguard India's export sectors, with particular attention to textiles.

An analysis by Guidance Tamil Nadu estimates that the state's projected loss under a 50 per cent tariff could be as high as $3.93 billion across sectors. The worst-hit sectors are textiles, machinery, gems and jewellery, and auto components, which together account for the majority of the projected loss. Across these sectors, the projected job losses range from 13 per cent to a massive 36 per cent.