135,000 Indians Lose Jobs as Trump’s Tariffs Hit Exports: Analyzing the Economic Crisis and Recovery Strategies
In a devastating blow to India’s export-driven economy, recent estimates indicate that approximately 135,000 workers have already lost their jobs due to U.S. President Donald Trump’s imposition of 50% tariffs on Indian goods. This figure, closely aligned with industry reports highlighting severe impacts on labor-intensive sectors, underscores the rapid fallout from the trade tensions sparked by India’s continued purchases of Russian oil. As of September 12, 2025, the tariffs—effective since August 27, 2025—have disrupted supply chains, forced factory closures, and ignited fears of broader economic slowdown. This in-depth analysis explores the origins of the crisis, immediate effects, historical parallels, future prospects, and practical guidance for affected stakeholders, drawing on the latest data and expert insights.
The Escalating US-India Trade War: An Overview
Trump’s tariffs, doubling from an initial 25% reciprocal duty to a punitive 50%, target over half of India’s $87 billion annual exports to the U.S., including textiles, gems, jewelry, seafood, and auto parts. The move is explicitly linked to India’s role as the largest buyer of discounted Russian crude, which the U.S. claims indirectly funds Russia’s war in Ukraine. Industry leaders warn that without swift interventions, job losses could escalate to hundreds of thousands or even millions, exacerbating India’s urban unemployment rate, which stood at 7.1% in June 2025.
Key Sectors Bearing the Brunt
- Textiles and Apparel: Tiruppur, India’s knitwear hub, faces up to 150,000 job cuts as exports plummet.
- Gems and Jewelry: Diamond exports to the U.S. have crashed 90% in six months, from $579 million to $58 million, leading to widespread layoffs.
- Seafood and Leather: Shrimp peeling units and leather factories report order cancellations, threatening rural livelihoods.
- Auto Parts and Furniture: These sectors anticipate a 40-45% export drop in 2025-26, putting additional jobs at risk.
Latest Events and News on Trump’s Tariffs and Indian Job Losses
Shashi Tharoor’s Critique on September 12, 2025
Congress leader Shashi Tharoor slammed the tariffs as “unfair sanctions,” warning of massive job losses and strained India-U.S. ties during a speech in Singapore. He described Trump as an “unusual president,” urging diplomatic negotiations to mitigate the damage.
Industry Warnings and Factory Closures in Early September 2025
On September 5, 2025, exporters in Tiruppur reported a “nightmare” scenario, with 150,000 jobs at immediate risk due to unviable U.S. shipments. Factories in Surat and Mumbai have begun layoffs, as highlighted in recent reports where owners expressed fears of bankruptcy.
Trump’s Team Escalates Rhetoric on September 2, 2025
Peter Navarro, a Trump aide, accused India of “profiteering” from Russian oil, blaming it for U.S. job losses and calling for Modi to align with the West. India dismissed these claims as “misleading,” vowing to diversify markets toward Russia and China.
GST Council Meeting Focuses on Countermeasures (September 3-4, 2025)
India’s 56th GST Council discussed reforms to buffer the $48-60 billion export hit, potentially shaving 0.2-0.9% off GDP.
Historical Context: US-India Trade Disputes and Tariff Wars
U.S.-India trade frictions date back to the 1970s, but escalated under Trump. In 2019, he revoked India’s GSP status, affecting $6 billion in exports. The 2025 tariffs echo this, but at a steeper 50%, amid global supply chain shifts post-COVID. Historically, similar U.S. actions against China in 2018 led to 245,000 American job losses, hinting at mutual pain.
Timeline of US Tariffs on India
| Date | Event | Impact |
|---|---|---|
| June 2019 | GSP revocation | $6B export loss |
| August 11, 2025 | Tariff threat announced | Fear in textiles, jewelry |
| August 27, 2025 | 50% tariffs imposed | Immediate order cancellations |
| September 5, 2025 | Job loss estimates surge | 135,000-150,000 affected |
| September 12, 2025 | Tharoor’s condemnation | Calls for negotiations |
Impacts of Trump’s Tariffs on India’s Economy and Workforce
Immediate Job Losses and Sectoral Disruptions
Estimates peg initial job losses at 135,000, with projections up to 150,000 in Tiruppur alone. Overall, millions could be at risk if exports fall 40-45%. Urban unemployment may rise, straining social safety nets.
Broader Economic Ramifications
The tariffs could reduce FY26 growth below 6%, with inflation from higher import costs. However, diversification to Russia offers offsets, as Moscow pledges to absorb tariff-hit goods.
Social and Regional Effects
Rural areas dependent on seafood and leather face poverty spikes, while cities like Surat see migration pressures.
Future Scopes: Recovery Paths and Global Realignments
By 2026, India may pivot to BRICS markets, reducing U.S. dependency from 18% to 10% of exports. Government support via GST reforms and subsidies could stem losses. Long-term, enhanced ties with Russia and China may boost energy security but risk Western isolation.
Potential Scenarios
- Optimistic: Negotiations yield tariff cuts; job recovery by mid-2026.
- Pessimistic: Escalation leads to 500,000+ losses; GDP dip of 1%.
- Balanced: Diversification stabilizes economy at 6% growth.
Frequently Asked Questions (FAQs)
How many jobs have been lost due to Trump’s tariffs?
Estimates range from 135,000 to 150,000 initially, with potential for more in affected sectors.
Which sectors are most impacted?
Textiles, gems, jewelry, seafood, and auto parts face the heaviest blows.
Why did Trump impose these tariffs?
To punish India for buying Russian oil, seen as funding the Ukraine war.
What is India doing in response?
Diversifying markets, seeking negotiations, and exploring retaliatory measures.
Could this lead to a global trade war?
Yes, with risks of inflation and supply chain chaos worldwide.
Navigating the Tariff Storm: Strategies for Resilience
As India grapples with this economic challenge, focus on innovation, market diversification, and policy support will be key. The crisis, while painful, could catalyze a more self-reliant economy, echoing the “Swadeshi” spirit.
Key Takeaways
- Job Crisis: 135,000 losses signal urgent need for intervention.
- Trade Shift: Pivot to non-U.S. markets essential.
- Diplomatic Push: Negotiations could ease tensions.
- Long-Term Growth: Opportunity for domestic reforms.
