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U.S. tariffs pose a significant risk to the employment in India's shrimp and textile sectors

U.S. tariffs take a toll on India's shrimp and textile exports, as competitors benefit from reduced duties.

, and Administrator

2025 September 8 . 12:19 PM

2 min read

U.S. tariffs pose a risk to employment in India's shrimp and textile sectors

U.S. tariffs pose a significant risk to the employment in India's shrimp and textile sectors

In a significant blow to Indian agriculture and industry, the tariff shock has forced shrimp exporters to slash payments to producers by nearly 20%, effectively wiping out most of the farmers' profits. This development, which has been published with permission from Thomson Reuters Foundation, affects millions of farmers, factory workers, and processors employed in these industries.

The United States, a major market for India's apparel exports, accounting for about a third of its textiles and garments, has imposed a tariff of more than 30% on Indian shrimp exports. This could rise to nearly 60% if India fails to avoid additional penalties. As a result, US buyers are pausing orders, asking Indian suppliers to share the tariff burden, and considering shifts to lower-cost hubs like Bangladesh, Indonesia, and Vietnam.

India's shrimp farmers, particularly vulnerable due to their reliance on loans and small businesses, are hit hardest by these developments. Ecuador, a key competitor for shrimp, pays far less in effective US tariffs, with surges in its shipments to the United States as a result.

The Indian textile sector, the second-largest employer after agriculture, provides direct employment to over 45 million people, many of them women. The industry's competitiveness is being threatened by the rising tariffs, leading some exporters to contemplate shifting their production base to countries with cheaper tariffs, such as Bangladesh and Vietnam, which have US duties of 20%, making them more competitive compared to India's near 60% tariff. China, another competitor, has a 30% tariff on its exports to the US.

The story is relevant to the Sustainable Development Goals (SDGs) 1 (Poverty), 8 (Economic growth), 10 (Inequality), 16 (Peace), and 17 (Partnerships). It is also related to topics such as energy, policy & finance, and regions including Bangladesh, China, India, Russia, United States, and Vietnam.

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