India's top exporting state says US tariffs decimate industries

One of India's richest states that relies heavily on exports said high US tariffs are causing “irreparable harm” to businesses in the region and called on Prime Minister Narendra Modi to urgently seek a trade deal with Washington.

MK Stalin, chief minister of Tamil Nadu, said export orders have dried up in some districts, resulting in a daily loss of 600 million rupees ($6.7 million) in revenue. In Tiruppur district, also known as the nation's knitting capital, there has been “a staggering write-off” of Rs 150 billion in confirmed orders, forcing production cuts of up to 30%, Stalin said in a letter to Modi on Thursday.

US President Donald Trump imposed 50% tariffs on Indian goods in August, one of the highest in the world, cutting exports to India's biggest market and threatening Modi's manufacturing ambitions. Despite months of negotiations and officials in New Delhi expressing optimism about a deal soon, both sides remain stuck in talks without any clear sign of whether tariffs will be reduced.

Stalin, who is part of the opposition and often criticizes the Modi government, described the situation in Tamil Nadu as an “escalating crisis” in his letter to the prime minister. The resulting economic setback has brought many small and medium-sized businesses to the “brink of collapse,” he added.

The United States is India's largest export market and high tariffs have hit labor-intensive sectors such as textiles, gems and jewelry, leather and footwear, forcing the federal government to intervene with relief measures for exporters.

“The current trade stalemate is not simply an economic setback but an imminent humanitarian challenge due to the irreparable damage caused by tariffs,” Stalin said in his letter.

Tamil Nadu, ruled by the Dravida Munnetra Kazhagam party, is one of India's largest export centers for textiles, electronics, leather and footwear and automobiles. As the country's most industrialized state, it competes with Vietnam and Mexico and is home to Apple Inc factories. Mobile phone exports are currently exempt from Trump's tariffs.

Tamil Nadu contributes 28% of the country's textile exports and employs around 7.5 million people in the sector, Stalin said. The leather and footwear industry in the state contributes 40% of the country's sectoral exports and employs more than a million workers, he stated.

“In this context, I implore you to prioritize resolving this tariff issue through a bilateral agreement as soon as possible,” the letter said.

Chandrababu Naidu, chief minister of Andhra Pradesh state and Modi's coalition partner in the government, also expressed concern about the damage that high US tariffs are having on the state's shrimp exports.