Karnataka Garment Industry Hit by Trump’s Tariffs, State Calls for New Export Strategies

With the United States (U.S.) imposing a 50 percent tariff on several Indian exports, Karnataka's key industries, especially garments and electronics manufacturing are facing mounting pressure. Industry leaders and state officials are now urging the Centre to develop new export strategies and safeguard support mechanisms to protect jobs and production capacity.

Trump Tariffs' Impact on Karnataka: Garment Sector Faces Slowdown, Workers at Risk

The garment sector, one of Karnataka's largest employers, is among the worst hit. Companies report that exports to the U.S. have stalled, several factories are running below capacity, and layoffs may be imminent if the situation persists.

According to Crisil, a ratings firm, the revenue growth for readymade garment manufacturers is expected to slow significantly due to these tariffs. The industry is now grappling with how to maintain operations and sustain employment levels in light of reduced growth prospects.

Garment industry leaders in Karnataka are preparing for layoffs, factory closures and halted exports due to the impact of recent U.S. tariffs. Union leaders are set to meet tomorrow to discuss important issues, including the Ganesh Chaturthi holiday for garment workers. They are calling for urgent government support and new export strategies to help the industry survive this difficult period.

"Trump's tariff announcement has come as a shock, and if implemented, it duty will severely impact exports," Gautam Nair, director at Matrix Design and Industries (subsidiary of Gokaldas Exports), said to Business Standard while adding that India's apparel sector already faces higher costs than leading competitors Bangladesh and Vietnam.

CM Siddaramaiah Calls Trump's Move 'Economic Blackmail'

Karnataka Chief Minister Siddaramaiah has sharply criticised the Union Government's handling of the United States' recent move to impose a 50 percent tariff on key Indian exports, calling it an act of "economic blackmail" by the U.S. and accusing Prime Minister Narendra Modi's administration of engaging in "headline management" rather than taking concrete measures to shield Indian industries.

"US President Donald Trump's 50 percent tariff on Indian goods is clearly economic blackmail," said the CM Siddaramaiah as per PTI report.

Karnataka IT Minister Flags Concern Over U.S. Tariffs

The impact is not limited to textiles. Karnataka's electronics manufacturing hubs, particularly in the Bengaluru region, are also expressing concern about downstream effects.

Karnataka's Minister for IT and Biotechnology, Priyank Kharge raised concerns over the US President Donald Trump's decision to impose a 50% tariff on Indian exports, cautioning that the move could erode India's competitiveness in comparison to emerging export rivals such as Vietnam.

Speaking to PTI, Kharge emphasised the potential impact on India's growing electronics manufacturing sector and urged the Central Government to respond with swift and decisive action to protect the industry.

Karnataka, home to a fast-growing tech and innovation ecosystem, is currently positioning itself as a major hub for high-end electronics manufacturing, with global players like Foxconn and Tata Electronics expanding their presence in the state.

"This requires a lot more deep dive because it has been 24 hours since the US has announced these trade tariffs. But I think this is something that the Government of India seriously needs to look at," Kharge said.