LUDHIANA, Aug. 28 — The 50 percent tariff imposed by the United States on Indian goods has sent shockwaves through Punjab’s export-driven economy, threatening sectors from textiles and auto components to leather and basmati rice with sharp losses, layoffs and an uncertain future.
The tariff, which took effect Wednesday in retaliation for India’s continued imports of Russian oil, is expected to wipe out profit margins for many exporters, most of whom operate under the micro, small and medium enterprises (MSME) category.
Rajinder Gupta, chairman emeritus of the Trident Group — a textile major that exports more than Rs 3,000 crore worth of goods annually to the US — said the impact could be devastating. “The implications of the high tariff will be serious. We have a little hope for policy changes that could help mitigate the losses,” he said.
Leather goods manufacturers in Jalandhar, a hub for the sector, voiced similar fears. Units with turnovers under Rs 100 crore that supply tool kits to the US say survival will be nearly impossible. “These units will have no option but to explore new markets in Europe, Asia and Africa,” said Gaurav Sud, a leading exporter. “But that will require them to undercut existing suppliers, which will hurt competitiveness and ensure that everyone in the business feels the heat.”
Auto component makers in Ludhiana have also begun renegotiating contracts. “While exports were viable under a 25 percent tariff, the new 50 percent rate eliminates our edge over Chinese suppliers, who pay only 30 percent. To survive, we will have to severely cut our profits,” said one exporter.
The basmati rice industry, one of Punjab’s flagship export sectors, is bracing for a severe downturn. “The new tariff will severely hit our exports,” said Ranjit Singh Josan, vice-president of the Punjab Rice Exporters Association. He warned of a looming supply glut. “Nearly 5 lakh metric tonnes of basmati remain unsold across India. Added to the 3 LMT normally exported to the US and a 10 percent increase expected in the upcoming harvest, this will create a surplus of 15–16 LMT. The glut will drive down prices of the new crop this season.”
Exporters said the tariff shock comes at a fragile time, with global uncertainty already eroding demand. The fear now is that prolonged disruption could not only hit revenues but also trigger job losses across Punjab’s industrial belt, where entire communities rely on the export economy.
