Trump’s Tariff Tsunami Hits India: Millions of Jobs at Risk, Govt Rushes to Rescue

New Delhi(The Uttam Hindu): In a move that’s triggered panic across India’s export sector, former U.S. President Donald Trump has proposed a massive 50% tariff on Indian goods—a decision that could threaten millions of jobs, disrupt supply chains, and cripple small businesses.

The announcement has sent shockwaves through Indian industries, particularly MSMEs (Micro, Small & Medium Enterprises) that rely heavily on U.S. markets. With fears of order cancellations, payment delays, and logistical bottlenecks, Indian exporters are staring at an economic cliff.

But the Modi government isn't standing still.

According to senior officials cited by the Hindustan Times, the Centre has activated a crisis-response strategy modeled on the COVID-era economic relief blueprint. The focus is on injecting liquidity, reviving disrupted exports, and shielding vulnerable industries from the fallout of Trump’s proposed "tariff bomb."

Emergency Measures on the Table

A key element of the plan is the possible revival of the Emergency Credit Line Guarantee Scheme (ECLGS), which proved to be a lifeline during the pandemic. The scheme had allowed businesses to borrow on 100% government-backed guarantees without providing collateral—helping them survive the 68-day lockdown.

Now, with MSMEs once again on the frontlines of a looming crisis, the government is considering tweaks and reactivation of such schemes to ensure they remain resilient.

Alongside short-term relief, India is also eyeing long-term solutions. These include diversifying exports beyond the U.S. and integrating Indian industries deeper into global supply chains. Until new trade routes and partnerships are secured, the government has vowed to support exporters with every tool available.

GST Council to Consider Tax Relief

Adding to the government’s rescue effort, the upcoming GST Council meeting is expected to address tax relief measures for affected sectors. Sources suggest that rate cuts or tax holidays could be on the table to cushion domestic industries from the impact of reduced foreign trade.

Despite the external threat, government officials remain confident in India’s economic resilience.“India’s economy is fundamentally driven by strong domestic consumption,” one official noted. “Exports are critical, but they account for only about 10% of our $4.12 trillion GDP. That cushion gives us the strength to absorb shocks like these.”

Indeed, India’s economic growth clocked in at 7.8% in the June-ending quarter, reflecting sustained momentum even amid global headwinds.

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