There is an urgent need for government aid in the industry -intensive industry that will be seriously affected, because 50% of the repressive tariff regime inspired by Donald Trump kicked today, the leading business economist said.
“The worst affected industries such as gems and jewelry, yarn, textiles and maritime products that could have a big impact on the coastal states like Kerala would need government assistance, especially due to the unemployment situation in the country,” said Biswajit Dhar, former professor Jawaharal University.
“While the government talked about the impact pillow, it is important that this is done urgent and efficiently on the lines of production motivations or PLI, which was offered by the manufacturing sector in India,” he said.
PLI was launched in 2020 in order to strengthen domestic production, attract investments and increase global competitiveness in strategic sectors by offering incentives based on performance for incremental production. This system provides financial incentives for the production of specified goods in India to create jobs, increase exports and reduce imports on imports.
Dhar said that the micro and the small sector – unlike larger micro, small and medium -sized enterprises (MSME) – faced the third big blow in the last 10 years. “After GST, Pandemia and now it is the third big blow. Most of these sectors are self -employed and would require the government of other SOPs and financial assistance to the last mile, otherwise they would simply disappear,” he said.
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Asked how the tariffs could affect unemployment, Dhar said that this number would be hypothetical at this stage and need to be monitored. “I would say that this is more of a matter of working in a country that could reduce to 40-45% of the pandemic level, from the level of half of 50 that exists today,” he said, adding that the word unemployment is not exactly in the situation, because many of these sectors are self-employed.
The total unemployment rate in India shows a declining trend, while the survey of regular labor (PLF) shows in 2022-23 by 3.2% for the usual status of persons aged 15 and over.
However, the latest data for May 2025 show an increase to 5.6%, which is driven by a sharp increase in youth unemployment, especially in rural and urban areas and higher rates for women compared to men. The key causes include the mismatch of skills between the requirements for education and the labor market and the conversion of a positive shift from agriculture to production and construction, which previously absorbed rural work.
Dhar also did not rule out the impact of tariffs on the pharmaceutical and mobile telephone industry. The American Pharmaceutical Industrial Indian Pharmaceutical Sector uses cost -effective production, especially generic drugs, which significantly benefits the US health system through lower drug prices and increased access. Indian companies will find a large and lucrative market in the US, especially for general drugs. This balance could be disturbed, he said.
Similarly, tariffs can also affect its smartphone industries. For the first time, India overtaken China as an exporter of smartphones No. 1 in the US, and after Apple was driven by a tariff-cited pivot to New Delhi.
According to a recent report published by the Research Firm Canalys, Indian devices in India were 44% of the import of smartphones in the US, which is sharply 13% in the same period last year. The total volume of smartphones produced in India jumped by 240%year -on -year, wrote Canalys.
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“It is also difficult for me to believe that nris will not buy gems and jewelry in the US,” Dhar said. Gems and jewelry were Indian exports of $ 10 billion to the US in 2024-25.
The US represents 20% of the exports of goods from India and 2% of GDP. High -sky tariffs mean that goods exporters would be uncompetitive on the US market, one of a handful of business partners with whom India has an excess of goods trade. India runs a sharp business deficit with China, Russia and SAE, with other best business partners.
(Tagstotranslate) US tariffs
