US Tariffs Threaten Millions of Jobs in India's Textile Sector as Orders Shrink

Entrepreneurs, workers in industry say they expect substantial revenue loss by year end

- Rohini Mohan

BENGALURU - Having keenly followed US President Donald Trump's "tariff crusade" over the past few months, textile exporter Harsha Mukund Soundararajan had long expected the mercurial American billionaire to train his sights on India at some point.

But when the tariffs were finally declared, Mr Harsha was stunned. Mr Trump imposed a so-called reciprocal tariff of 25 per cent, and India faces an additional 25 per cent tariff from Aug 27 due to its purchases of sanctioned Russian crude oil.

"All our American buyers have gone into a paralytic shock. Most buyers in the sector have held orders, if not cancelled them," said Mr Harsha, the founder of Cloves, a manufacturer of industrial textiles such as hospital bed linen and medical gowns in Coimbatore, in the southern Indian state of Tamil Nadu.

"We are waiting and hoping for the governments to negotiate the tariff down," he added. His decade-old company exports 65 per cent of its products to the US.

The prospect of a 50 per cent tariff on Indian exports to the US with only Brazil subject to a higher tariff - is expected to hurt the sectors that employ the most people in the South Asian country, such as textiles, gems and jewellery, and engineering goods.

"Textiles, gems and jewellery, which account for 25 per cent of India's exports to the US, are likely to be most affected. Small and medium-sized enterprises (SMEs) have a more than 70 per cent share in these sectors, and will be hit hard," a report released by Crisil Intelligence on Aug 20 said.

In 2024, India accounted for around 6 per cent of the apparel imported by the US, valued at US$4.8 billion (S$6.2 billion). This was a third of India's apparel exports that year.

Textiles make up 8 per cent of India's exports, with manufacturing hubs like Tamil Nadu in the south, Punjab in the north, and Gujarat in the west accounting for the bulk of the output.