Trump-era tariffs threaten ‘Make in India’ exports

The imposition of sweeping U.S. tariffs, reaching as high as 50 percent on crucial Indian exports such as textiles, gems, and shrimp, has cast a long shadow over the nation’s flagship “Make in India” campaign. This aggressive tariff regime, announced under former President Trump’s administration, is triggering fundamental recalibrations across India’s export landscape. Industries that once thrived on high-volume exports now face an urgent need to reroute their growth strategies. Sectors previously protected by the U.S. market’s conducive demand—for instance, apparel and footwear manufacturers—are now confronting an existential threat that challenges not only their profitability but also the broader economic vision championed by policymakers. Exporters, suppliers, and labor-intensive clusters must adapt swiftly or risk being undercut in global trade dynamics.

Beyond immediate business impacts, the tariffs raise broader, systemic concerns. India’s export composition—traditionally balanced between services and goods—leans heavily on labor-led sectors now at risk. A sudden U.S. turnaround on trade terms disrupts not only production lines but also long-standing supply chains that have been developed over decades. Companies are weighing relocation of manufacturing, supply chain diversification, and margin compression—all while grappling with the socioeconomic fallout of potential layoffs and domestic industrial slowdown. The downstream effects could range from reduced foreign direct investment in vulnerable regions to slower growth in employment-intensive states, threatening both economic inclusivity and national growth targets.

In response to these pressures, the Indian government is orchestrating a counter-offensive on multiple fronts. First, it is accelerating export diversification—channeled through strategic outreach to over 50 new markets across West Asia and Africa. This shift aims to ensure that India’s export architecture becomes more resilient, less U.S.-centric, and aligned with emerging demand nodes across the global South. Second, domestic industries are being urged to upgrade value chains, embrace automation where feasible, and move up the ladder into higher-value product segments. Finally, diplomatic channels remain active, with officials drawing firm “red lines” in discussions with the U.S., even while signaling openness to engagement around trade grievances. The interplay of geopolitical resolve and market adaptation now defines the future trajectory of India’s manufacturing ambitions.