HYDERABAD: A 50% tariff wall erected by the United States of America threatens to unravel Telangana’s booming export economy, with its burgeoning textile sector directly in the line of fire.
As the top destination for the state’s goods, a trade war with the US puts billions of dollars and a key industrial growth strategy at immediate risk.
The US accounts for nearly one-third of Telangana’s merchandise exports, worth an estimated Rs 25,000 crore–Rs 30,000 crore annually. After pharmaceuticals, textiles are the state’s biggest export to the American market, according to the Socioeconomic Outlook 2024, which shows the US cornering 28.16% of Telangana’s total exports, followed by the United Arab Emirates (6.9%) and China (5.2%).
The concern is particularly acute as the state positions itself as a textile hub with the Kakatiya Mega Textile Park in Warangal. Major players like KITEX have set up units in the state with an eye on the American market.
“The 50% tariff will definitely impact Telangana’s exports, like other states,” Jayesh Ranjan, Chief Executive Officer (CEO) of the Industry and Investment Cell in the Chief Minister’s Office, told TNIE. “There will be no effect on pharma, where Telangana leads, but textile exports will face large-scale risks if the tariff continues. We hope the Union government will intervene.”
For now, our plans in TG are unchanged: KITEX
KITEX Group Chairman and MD Sabu Jacob struck a more cautious note. “This is not a final tariff. If the war in Ukraine ends, the measures may be withdrawn. Foreign buyers are not overly concerned yet, as they see this as temporary. For now, our plans in Telangana remain unchanged, but if tariffs persist, we will need to reassess,” he said.
Federation of Telangana Chambers of Commerce and Industry (FTCCI) vice-president Rachakonda Ravi Kumar added that gems, jewellery and textiles will bear the brunt, though defence exports may escape unscathed.
“We expect the issue to be resolved soon, but if the situation drags on, we have urged the government to extend tax and GST relief,” Ravi Kumar said.