Tamil Nadu’s export-driven economy is facing fresh turbulence, with Finance Minister Thangam Thennarasu warning that nearly 30 lakh jobs could be at risk if the recent US tariff hikes on Indian goods persist. Speaking at the pre-budget consultation chaired by Union Finance Minister Nirmala Sitharaman, Thennarasu said the state’s export sector is disproportionately exposed, as 31% of its outbound shipments are bound for the US market.
The warning comes amid escalating trade frictions stemming from Washington’s tariffs on Indian imports first a 50% levy imposed in August 2025 over Russian oil purchases, and now a potential 500% duty reportedly gaining backing from President Donald Trump. The impact has been especially severe on Tamil Nadu’s textile sector, which accounts for 28% of India’s textile exports and employs over 75 lakh workers.
Exports from Tiruppur, the country’s knitwear hub, have seen sharp declines as American buyers turn to cheaper sources like Vietnam and Bangladesh. Industry groups anticipate further order contractions of up to 50% in the January-March 2026 quarter, putting thousands of small and medium exporters under strain.
Thennarasu also flagged broader fiscal pressures, including an estimated Rs 10,000 crore revenue loss from GST rate rationalization and delays in central fund disbursals amounting to over Rs 6,600 crore. With trade talks between New Delhi and Washington still uncertain, Tamil Nadu’s manufacturing backbone spanning textiles, leather, and auto components faces one of its toughest financial tests in recent years.
