CHENNAI: Tamil Nadu has called on the Union government to step in as US tariffs threaten to derail its textile industry, which employs 75 lakh people and is one of the largest contributer to India’s textile exports. Chief Minister MK Stalin warned that without immediate action, up to 30 lakh jobs in textiles sector could be at risk if tariffs rise from 25 per cent to 50 per cent.
In a letter to Prime Minister Narendra Modi, Stalin laid out a policy roadmap aimed squarely at the textile sector, the state’s largest export earner. Key proposals include fixing the inverted duty structure under the Goods and Services Tax (GST) for the man-made fibre value chain by bringing the entire chain under a 5 per cent slab, and eliminating import duties on all varieties of cotton.
The chief minister also pushed for stronger credit support, extending the Emergency Credit Line Guarantee Scheme (ECLGS) to cover 30 per cent collateral-free loans, with a 5 per cent interest subsidy and a two-year moratorium on principal repayment. He further recommended boosting the Remission of Duties and Taxes on Export Products (RoDTEP) scheme to 5 per cent and expanding pre- and post-shipment credit to cover all textile exports, including yarn.
In the last financial year, while 20 per cent of India’s total goods exports of $433.6 billion were destined for the United States, 31 per cent of Tamil Nadu’s $52.1 billion in goods exports went there. This higher reliance on the US market implies that any tariff impact on Tamil Nadu would be disproportionately greater than for most other states. US President Donald Trump’s tariffs, Stalin said, pose a "disproportionate threat" to the state’s manufacturing and employment landscape.
The sectors that would also be impacted is apparel, leather, auto components, machinery, gems and jewellery, marine products, and chemicals. "All these sectors are labour-intensive, wherein export slowdown will quickly result in mass layoffs," the chief minister said.
He said that textiles demanded urgent attention because of its scale, employment intensity, and contribution to export revenue. Industry bodies consulted by the state government backed the call, noting that long-standing issues such as the GST duty structure and high credit costs have eroded global competitiveness.
Stalin framed the current tariff threat as a catalyst for overdue reforms, emphasising that addressing these structural bottlenecks is critical not just to weather the immediate disruption, but to secure Tamil Nadu’s position as India’s largest textile hub.