India braces for mass layoffs after Donald Trump doubles tariffs on Indian exports. Key sectors like textiles, gems, carpets, and shrimp face major losses. Can the government protect jobs?
India’s Nightmare: Trump’s Tariffs Spark Job Fears and Economic Jolt
A Morning of Shock
It was supposed to be just another working day. However, on the morning of August 27, 2025, Indian exporters awoke to a thunderbolt from Washington. President Donald Trump’s government imposed a 50% tariff on Indian exports to the United States, doubling the existing 25% duty.
The reason? Washington’s anger over New Delhi’s continued purchase of Russian oil, a geopolitical choice that has now triggered a storm of economic consequences.
“Holes in Our Business”
The news hit traders like Anuj Gupta, who distributes garment accessories to big fashion brands, like a punch in the stomach. Nearly 40% of his business is based on American buyers. Overnight, the numbers stopped adding up.
“Suddenly, it feels like there are holes in our business model,” he told colleagues. His worry is echoed across thousands of small and medium-sized exporters who fear not just reduced orders, but outright cancellations.
Fear of Buyers Leaving
The anxiety is not limited to the present. Exporters dread a long-term fallout—American companies may soon begin shifting supply chains elsewhere, to countries untouched by Trump’s tariff war.
“If this drags on, buyers will simply look to Vietnam, Bangladesh, or Mexico,” warned one garment exporter. “And once they move, they don’t easily come back.”
Government’s Reassurance
Sensing panic, the Federation of Indian Export Organisations (FIEO) quickly knocked on the government’s door. Their demand: an economic package to soften the blow.
Finance Minister Nirmala Sitharaman, in public statements, insisted there would be “no layoffs.” Yet, industry insiders know that translating that promise into reality will be extraordinarily difficult.
After all, how do you prevent layoffs when orders dry up and margins collapse?
Industries on the Frontline
Some sectors are more exposed than others. Among the most vulnerable:
Textiles & Garments – already competing on razor-thin margins.
Gems & Jewellery – a luxury category likely to be hit hardest by price hikes.
Carpets – deeply reliant on American buyers.
Shrimp Exports – perhaps the most at risk of all.
Take Sandhya Marines, a seafood exporter from Andhra Pradesh. With 90% of its shrimp going directly to the U.S., the new tariff threatens near-collapse. “We are staring at a nightmare,” the company’s management reportedly said.
Ripple Effects Across India
The fallout is not just about factories and exporters. Layoffs could affect households, cities, and entire communities. From diamond polishers in Gujarat to shrimp packers in coastal Andhra, the concern is the same: can my work last the next few months?
Economists warn that if tariffs remain in place, India’s export-driven jobs could see mass layoffs. And unlike previous trade disputes, this one is tangled in geopolitics—making resolution far from simple.
A Crossroads Moment
India now faces a difficult choice. Should it scale back Russian oil imports to appease Washington? Or should it absorb the economic pain in order to stick to its independent energy policy?
Neither path is easy. One risks unemployment and a slowdown in export industries; the other risks geopolitical strain and energy insecurity.
The Road Ahead
What lies ahead remains uncertain. For now, exporters are bracing for layoffs, workers are clinging to reassurances, and policymakers are scrambling for answers.
The one thing everyone agrees on? India has stepped into a nightmare—a crisis where global politics and domestic livelihoods collide, leaving millions anxiously watching what comes next.