Tamil Nadu has warned of devastating economic and employment losses if US tariffs on Indian exports are doubled to 50 per cent.
Chennai
The Tamil Nadu government has raised alarm over the severe impact of the United States’ 25 per cent tariff on Indian exports, warning that a proposed escalation to 50 per cent could devastate the state’s manufacturing sector and cost millions of jobs.
In a letter to Prime Minister Narendra Modi, Chief Minister M.K. Stalin underscored that Tamil Nadu’s reliance on the US market is disproportionately high compared to other Indian states. While 20 per cent of India’s $433.6 billion exports in 2024–25 went to the US, as much as 31 per cent of Tamil Nadu’s $52.1 billion exports were shipped there.
This dependence, Stalin cautioned, makes the state particularly vulnerable to tariff shocks. Key sectors at risk include textiles, apparels, machinery, auto components, gems and jewellery, leather, footwear, marine products, and chemicals—all of which are labour-intensive industries. A contraction in these industries, he noted, would quickly trigger mass layoffs.
The textile sector faces the gravest threat, accounting for 28 per cent of India’s textile exports and employing nearly 75 lakh people in the state. Officials estimate that as many as 30 lakh jobs could be lost immediately if tariffs are doubled to 50 per cent.
To cushion the blow, Stalin urged the Centre to implement urgent corrective measures. His proposals include rectifying the GST inverted duty structure in the man-made fibre chain by introducing a uniform 5 per cent slab, exempting import duty on all cotton varieties, and providing collateral-free loans of up to 30 per cent under the Emergency Credit Line Guarantee Scheme (ECLGS) with a 5 per cent interest subvention and a two-year repayment moratorium.
