New Delhi/Srinagar, Aug 26 – The United States’ decision to impose a steep 50 percent tariff on Indian exports has sent cottage and MSME sectors across the country into a state of uncertainty. The tariff hike, announced by President Donald Trump and effective Wednesday, follows two earlier rounds of duties this month. While there are questions on potential implications for Jammu & Kashmir’s trade and manufacturing sectors, Ziraat Times analyses what the actual impact could be.
Small businesses most vulnerable
The new tariff covers a wide range of Indian exports – from gems and jewellery, garments and footwear to carpets, leather and industrial chemicals. These are industries overwhelmingly dominated by micro, small and medium enterprises (MSMEs), which employ millions across the country.
Analysts at the Global Trade Research Initiative (GTRI) estimate that Indian exports to the US could fall from $86.5 billion this year to about $50 billion by 2026. Labour-intensive industries such as textiles, gems and jewellery, shrimp and carpets face export collapses of up to 70 percent, endangering hundreds of thousands of jobs.
Small companies are unlikely to survive this kind of hit.
Would J&K’s exports be impacted?
For Jammu & Kashmir, the impact has started to show, especially in the handicrafts sector. While the region exports handmade carpets, pashmina shawls, papier-mâché products and walnut wood furniture to the US in modest quantities, orders have been cancelled in the last 2-3 weeks, exporters told Ziraat Times.
“Even before this tariff, competition was tough. A 50 percent duty makes Kashmiri products unaffordable in the US,” said Sheikh Tariq, a Srinagar-based exporter.
“Thousands of artisans, weavers and craftsmen have started to feel the impact as they are unlikely to get paid soon. However, exporters have already started to look for alternative markets”, said Syed Nadeem, another exporters.
Trade bodies in the Valley warn that this move could accelerate the decline of traditional crafts, which have been struggling against cheaper machine-made substitutes.
Another major export commodity from J&K – apples – is unlikely to be affected as US is not an export destination for this horticulture product there.
Government response and concerns
The Indian government has promised tax relief, subsidies, and support to diversify exports to new markets such as Latin America and the Middle East. Kashmir’s trade bodies have been lobbying in Delhi to reduce the GST on handicrafts for some relief. Informed sources told Ziraat Times that such a tax relief would soon be announced.
Prime Minister Narendra Modi has also called for greater self-reliance, saying India “must not sit and cry” about global protectionism.
Broader impact
Economists estimate that Trump’s tariffs could shave nearly 1 percent off India’s GDP growth, equivalent to a loss of about $36 billion.
Outlook
For India’s MSMEs and Kashmir’s artisan sector, the road ahead looks difficult. With global competition intensifying, experts say survival will depend on urgent government support, trade diversification, and investments in design and branding.
