3,00,000 jobs at risk? Experts say THESE sectors likely to get impacted due to Trump tariffs on India
The hiked US tariffs on Indian exports may significantly affect India's job market, particularly in textiles, auto components, and gems and jewellery, with estimates putting between 2-3 lakh jobs at risk. However, not all experts feel the situation is so dire.
There are concerns among experts that increased tariffs announced by President Donald Trump on Indian imports into the United States, will have a negative impact on jobs in the affected sectors.
According RP Yadav, founder and CMD of workforce solutions and HR services provider Genius HRTech, the hiked US tariffs are expected to significantly impact India's employment landscape in industries heavily dependent on the US market for growth and continuity.
Which sectors will be hardest hit?
Sectors such as agriculture, auto components, gems and jewellery, and textiles are likely to be among the worst impacted, reported PTI quoting Yadav. He added that even within these sectors, it is the micro, small and medium enterprises (MSMEs) who will bear the brunt.
How many jobs are on the chopping block?
- Yadav estimates that between 2,00,000 to 3,00,000 jobs are at immediate risk.
- Further, the labour-intensive textiles industry alone could potentially lose 1,00,000 jobs, if the tariff regime continues beyond the next six months, he added.
- He added that in the gem and jewellery sector, including units in Surat and SEEPZ in Mumbai, “thousands of jobs are at risk due to reduced demand and cost escalation in the US market”, he added.
US tariffs impact: Is the situation so dire?
However, not all agree. Balasubramanian Anantha Narayanan, Senior VP at TeamLease Services, feels that unlike China, India is largely a domestic consumption driven economy. Thus, any impact from the US tariffs would not impact jobs.
“At this point in time, we aren't seeing any signs of a slowdown or loss of jobs. This also by extension means that our jobs are largely in service of domestic demand too, with the exception of some sectors like ITeS among others,” Narayanan said.
He added, “Our exports to the USA are $87 billion, which is roughly about 2.2 per cent of our overall GDP. Largely pharma, electronics etc. won't be affected for now, which will further limit the export exposure to industries such as textiles, gems and jewellery among others.”
Further, Narayanan noted that the full 50 per cent tariff hike comes into effect later this month on August 27, and it is possible that some negotiations could happen before that.
He added that positives from the recently announced free trade agreement (FTA) with the UK and other countries, could possibly make way for the redirection of Indian goods, rather than a complete shut down of the exports.
“Even if these US tariffs do come about, we'll definitely figure out a way of redirecting or diversifying our trade to other markets. Therefore, at this point in time, we aren't seeing any signs of a slowdown or loss of jobs. It's an evolving situation and we'll get to know more in due course of time,” he feels.
Aditya Mishra, MD and CEO of CIEL HR also feels that while the US tariff scenario is unsettling for Indian exporters, especially those in the auto components, electronics, engineering goods, footwear, gems and jewellery, leather, shrimp, and textiles, widespread layoffs appear unlikely at this stage.
“Companies are already in cost-containment mode, reducing discretionary spending, streamlining production, and freezing hiring. The immediate pressure will be on temporary and contract roles, particularly shop-floor workers, artisans, sales and logistics staff, and some mid-level managers in export-led units. This will have a cascading effect on thousands of MSMEs in the supply chain, which collectively account for a large share of employment,” Mishra felt.
(With inputs from PTI)