India's Economy Reels as US Tariffs Slam Country

India's textile and garment industry is on a "full stop" after a 50 percent tariff on Indian goods took effect in the US, crippling new orders and putting millions of jobs at risk. The Indian government has announced a plan to help exporters find new markets, but the country's economy is likely to suffer significantly as it loses its $130 billion annual trade in goods with the US.

Key Takeaways:

• India's textile and garment industry, which accounts for 2 percent of the country's formal economy and millions of jobs, has come to a halt due to the US tariffs.
• The industry has been hit by American buyers building up inventories in preparation for the tariffs, resulting in a complete halt of new orders.
• The Indian government has announced a $28 billion program over six years to help exporters find new markets and mitigate the effects of the tariff regime.
• Prime Minister Narendra Modi may be more open to re-evaluating his country's partnership with China after this week's bruising experience with the US.
• Indian businesses have been exempt from tariffs on products such as pharmaceuticals and smartphones, but the exemptions are only temporary and do not cover the majority of the country's economy.
• India had worked to build a good trade relationship with the US, with the US being its biggest importer, and the two countries had a "perfect complementarity" in their exchange.

Statistics:

• 50%: The rate of the US tariff on Indian goods.
• $130 billion: The annual trade in goods between India and the US.
• 2%: The percentage of India's formal economy accounted for by the textile and garment industry.
• 9:30 AM: The time when the 50 percent US tariff on Indian goods went into effect.
• $28 billion: The amount of funding over six years allocated to help exporters find new markets and mitigate the effects of the tariff regime.
• 20: The number of Indian soldiers killed in a bloody melee with Chinese troops in 2020.

Sources:

• "India's textile and garment industry is on a 'full stop' after a 50 percent tariff on Indian goods took effect in the US, crippling new orders and putting millions of jobs at risk." - Chandrima Chatterjee, secretary general of the Confederation of Indian Textile Industry.
• "The money may belong to someone else, but the sweat is ours" - Prime Minister Narendra Modi.
• Indian market indexes lost a percentage point of value in their worst performance of the summer after the tariffs took effect.
• "At the moment, it's a full stop" for India's textile and garment industry, Ms. Chatterjee said.
• $130 billion: The annual trade in goods between India and the US.
• 20: The number of Indian soldiers killed in a bloody melee with Chinese troops in 2020.
• Amit Dave/Reuters: Workers inspecting clothes at a garment factory on the outskirts of Ahmedabad, India.