Trump's 50% tariffs could risk 3L Indian jobs, warn experts
What's the story
Experts have warned that the recent tariff hike by US President Donald Trump on Indian imports could jeopardize nearly 300,000 jobs in India. RP Yadav, the founder and CMD of Genius HRTech, a workforce solutions and HR services provider, said these tariffs will have a major impact on India's employment landscape. The sectors most affected are agriculture, auto components, gems and jewelry as well as textiles.
Sectoral impact
MSMEs likely to be hit hardest
Yadav emphasized that micro, small and medium enterprises (MSMEs) in these sectors are likely to be hit the hardest by the US tariff hikes. He estimated that 200,000-300,000 jobs could be at immediate risk due to these changes. The labor-intensive textiles industry alone could see a loss of 100,000 jobs if this tariff regime persists beyond six months.
Job vulnerability
Gems and jewelry sector at risk
In the gems and jewelry sector, particularly in Surat and SEEPZ Mumbai, thousands of jobs are at risk due to reduced demand and cost escalation in the US market. Yadav's estimates highlight a potential major impact on employment in these sectors as a result of Trump's tariff hike.
Varied opinions
India is mainly a domestic consumption-driven economy: Narayanan
However, not everyone agrees with Yadav's assessment. Balasubramanian Anantha Narayanan, Senior VP at TeamLease Services, said India is mainly a domestic consumption-driven economy and the US tariffs won't affect jobs. He noted that India's exports to the US are $87 billion or 2.2% of our overall GDP, and sectors like pharma and electronics won't be affected for now.
Negotiation prospects
Negotiations may happen before tariff hike takes full effect
Narayanan also suggested that some negotiations could happen before the full 50% tariff hike comes into effect on August 27. He pointed out that positives from the recently announced free trade agreement (FTA) with the UK and other countries could possibly redirect Indian goods, rather than completely shutting down exports. This could help mitigate potential job losses in sectors heavily reliant on US exports.
Cautious outlook
Widespread layoffs seem unlikely at this stage
Aditya Mishra, MD and CEO of CIEL HR, also warned that while the US tariff scenario is unsettling for Indian exporters in sectors like auto components, electronics, engineering goods etc., widespread layoffs seem unlikely at this stage. He said companies are already in cost-containment mode and the immediate pressure will be on temporary and contract roles. This could have a cascading effect on thousands of MSMEs in the supply chain which employ a large number of people.