The US President has imposed a 25% tariff on India effective August 7, 2025, with an additional 25% to be added by August 27, 2025, bringing the total to 50%.
This significant tariff is expected to impact India’s job market. According to a survey by SightsIn Plus, 55% of respondents believe it will severely hit jobs in India, while 14% think there will be no impact.
Meanwhile, 31% believe the 50% tariff will affect jobs only in the short run. Sectors like IT services, manufacturing, and exports are anticipated to feel the most immediate pressure.
Sector-wise India’s Export to USA
India’s exports reflect a blend of traditional strengths and rapidly growing high-value sectors. In FY 2023–24, total exports of goods and services reached US $776.7 billion, with FY 2024–25 projections at US $824.9 billion.
Key sector-wise highlights:
- IT Services: One of India’s largest export earners, contributing over US $250 billion in FY 2023–24. Global demand for software development, consulting, cloud solutions, and digital transformation continues to drive growth, led by IT hubs like Bengaluru, Hyderabad, and Pune.
- Electronics: Exported US $29.1 billion in FY 2023–24, growing 23.6% year-on-year. Mobile phones make up more than half of this value.
- Pharmaceuticals: US $27.8 billion in FY 2023–24, with India as the world’s largest supplier of generics and vaccines.
- Engineering Goods: US $109.3 billion in exports, spanning machinery, auto components, and capital goods.
- Petroleum Products: Monthly exports often cross US $6–8 billion, remaining a top foreign exchange source.
- Agricultural Products: US $48.1 billion in FY 2023–24, led by cereals, spices, and processed foods.
- Gems & Jewellery: A historic export pillar, sustaining millions of jobs.
- Textiles & Apparel: Strong demand for ready-made garments, especially in the US and Europe.
This diversified export profile to the USA shows the potential impact on India’s job market across sectors such as IT services, pharmaceuticals, textiles, gems & jewellery, and manufacturing.
According to a SightsIn Plus survey, India may face the greatest impact on IT services, followed by gems & jewellery, with other key sectors also affected.
IT Services
According to the survey, 60% believe that the already slowing IT sector will be hit hard by the 50% tariff on India, severely impacting IT managed services jobs, eroding its cost advantage, and making contracts far costlier for US clients.
Such a steep increase could prompt contract renegotiations, early terminations, or shifts toward alternative delivery hubs like the Philippines, Vietnam, or nearshore locations.
Indian IT firms might need to expand onsite operations or relocate work, raising costs further. This would slow employment growth in the IT-BPM sector, affect allied industries, and reduce India’s global market share. While niche expertise may retain some business, overall competitiveness and export revenues would face serious pressure.
Gems & Jewellery
According to the survey, 15.2% believe the gems & jewellery sector will be significantly impacted by the 50% tariff on India.
As a historic export pillar, this industry sustains millions of jobs, particularly among artisans, craftsmen, and small manufacturers. Higher tariffs are likely to erode India’s price competitiveness in key US markets, leading to reduced orders and shrinking profit margins.
This could result in production slowdowns, potential layoffs, and a loss of market share to competing countries. Given its deep integration with global trade, the sector’s vulnerability under the new tariff regime poses a serious challenge to employment and export revenues.
Textiles and Apparel
According to the survey, 9.2% believe textiles and apparel will be the next most hit industry by the 50% tariff. Despite strong demand for ready-made garments in the US and Europe, higher costs could erode competitiveness, reduce orders, and lead to job losses in manufacturing and allied sectors.
Impact on Other Sectors
Over 10% of respondents believe that, based on their export values, jobs will be impacted in multiple key sectors, including electronic goods, pharmaceuticals, engineering goods, petroleum products, and agricultural products.
Electronics, with exports of US $29.1 billion in FY 2023–24, and pharmaceuticals, at US $27.8 billion, face potential demand drops in the US market.
Engineering goods and petroleum exports could also suffer from reduced competitiveness, while agriculture—ranging from cereals to processed foods—may see declining orders.
Together, these sectors employ millions jobs, meaning the 50% tariff could have a widespread ripple effect on India’s job market across both high-tech and traditional industries.
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