American Tariffs Threaten 10 Lakh Jobs in India, Major Sectors to Face Severe Impact

Brijesh Goyal, Chairman of the Chamber of Trade and Industry (CTI), stated that this decision will significantly impact Indian trade, putting millions of jobs at risk and causing substantial losses to several sectors.

Sectors Facing Major Losses

According to Goyal, the tariffs are a major blow to key Indian sectors such as textiles, leather, gems and jewelry, auto parts, chemicals, pharmaceuticals, seafood, and electronics. Approximately 10 lakh jobs in these sectors are now at risk.Due to the increased tariffs, Indian goods will become around 35% more expensive in the American market. As a result, American buyers may prefer sourcing goods from countries like China, Vietnam, or Bangladesh.

$48 Billion in Exports at Risk

CTI estimates that this decision could impact Indian exports worth approximately $48 billion. India exports significant quantities of pharmaceuticals (53%), textiles (53%), gems and jewelry (37%), auto parts (28%), chemicals (13%), and seafood (22%) to the US, all of which will now face direct consequences.

Uncertainty Surrounding Existing Orders

Traders are uncertain about whether the new tariffs will apply to orders already placed or goods in transit. The lack of clarity from US authorities has further exacerbated the challenges faced by small and medium-sized traders.

In 2024, India exported engineering goods worth approximately ?1.7 lakh crore, including steel products, machinery, and automobile parts, to the US. These goods previously faced a 10% tariff, which has now increased to 50%. As a result, an item that sold for $100 in the US will now cost $150, potentially reducing demand for Indian goods and leading to a 20-25% drop in exports.

Electronics and Pharmaceuticals Also Affected

Last year, India exported electronics worth ?1.25 lakh crore and pharmaceuticals worth ?92,000 crore to the US. Previously, electronics faced a minimal 0.41% tariff, and pharmaceuticals had no tariff. Now, both will become 50% more expensive in the US market.

India Must Respond Firmly

In a letter to Prime Minister Narendra Modi, Brijesh Goyal urged India to respond to the US’s actions. He suggested reducing dependence on the US market and exploring new markets in countries like Germany, UK, Singapore, and Malaysia.

 Goyal also recommended imposing retaliatory tariffs on US imports such as expensive gems, nuclear reactor components, aircraft equipment, electrical goods, plastics, nuts, and steel.