Is Tamil Nadu Facing a $3.9 Billion Export Loss Due to US Tariffs?

Chennai, Sep 1 (NationPress) Tamil Nadu has expressed serious concerns regarding the significant 50 percent tariff imposed by the US on imports, cautioning that the state could potentially incur losses amounting to $3.93 billion (Rs 34,642 crore) in the fiscal year 2025-26.

Guidance Tamil Nadu, the state's investment promotion agency, has projected that the textile sector alone may suffer losses of approximately $1.62 billion (Rs 14,280 crore), rendering it the most adversely affected industry.

In a statement issued by the Chief Minister's Office (CMO), Chief Minister M.K. Stalin highlighted these worrying forecasts and reiterated his request for immediate intervention from the Union government to safeguard export-oriented industries, especially textiles. The state’s report emphasized that while the US represents around 20 percent of India’s total exports, Tamil Nadu’s share of US-bound exports is significantly higher, standing at 32 percent in 2024-25. This situation, it argued, places Tamil Nadu in a disproportionately precarious position regarding trade disturbances.

The repercussions of the tariff increase are anticipated to affect various sectors, including textiles, jewellery, machinery, and auto components, with potential job losses estimated between 13 percent and 36 percent of the current workforce.

The state government has previously cautioned that nearly 30 lakh individuals could lose their jobs if the circumstances remain unchanged. Tamil Nadu plays a crucial role, contributing 28 percent of India’s total textile exports, with Tiruppur being the epicenter of this industry.

The knitwear capital generated around Rs 40,000 crore in foreign exchange earnings last year alone.

The government release further emphasized that women would be disproportionately affected by this crisis, as they constitute 65 percent of the workforce in Tiruppur’s textile and related industries.

Recalling his previous correspondence with Prime Minister Narendra Modi on August 16, CM Stalin again urged for urgent, targeted measures.

While he acknowledged the Union government’s suspension of the 11 percent customs duty on cotton imports until December 31, he remarked that this relief is merely temporary. “This action provides limited respite. The larger crisis can only be resolved if the US tariff is abolished or alternative strategies are implemented to mitigate the impact,” the statement emphasized.

The Chief Minister warned that if the Centre does not act swiftly with a comprehensive plan, the tariff shock could devastate Tamil Nadu’s export foundation, resulting in the loss of thousands of jobs and exacerbating social distress in one of India’s most industrially dynamic states.