Chennai: In the wake of US President Donald Trump imposing tariffs on Indian goods, Tamil Nadu Chief Minister M. K. Stalin on Saturday wrote to Prime Minister Narendra Modi, highlighting the serious impact on exporters in the State and seeking urgent relief measures.
Tamil Nadu Hit Harder than Other States
“I wish to bring to your attention a matter of considerable concern to Tamil Nadu, as it faces severe implications due to the current 25% tariff and its potential escalation to 50%,” Stalin wrote in the letter, a copy of which was shared with the media.
He pointed out that while 20% of India’s total goods exports of $433.6 billion in the last financial year went to the United States, Tamil Nadu’s dependency was much higher, with 31% of its $52.1 billion exports destined for the US. This, he stressed, made Tamil Nadu far more vulnerable compared to other Indian states.
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Labour-Intensive Sectors at Risk
The most-affected sectors are textiles, apparel, machinery, auto components, gems and jewelry, leather, footwear, marine products, and chemicals all of which are highly labour-intensive. Any slowdown in exports could lead to mass layoffs, Stalin warned.
Tamil Nadu accounted for 28% of India’s textile exports in 2024-2025, the highest among all states. The textile sector alone employs nearly 75 lakh people, and with tariffs rising from 25% to a possible 50%, an estimated 30 lakh jobs are at immediate risk.
Key Demands for Relief
Based on consultations with industry associations, Stalin urged correction of the GST inverted duty structure for the man-made fiber value chain by bringing the entire chain under a 5% slab and exemption of import duty on all varieties of cotton.
He also called for collateral-free loans of up to 30% under the Emergency Credit Line Guarantee Scheme (ECLGS) with 5% interest subvention and a two-year moratorium on principal repayment. Enhancing Remission of Duties and Taxes on Exported Products (RoDTEP) benefits to 5%, and extending pre- and post-shipment credit to all textile exports, including yarn, were also suggested.
Call for Special Financial Package
Stalin further demanded a special interest subvention scheme for all tariff-hit exporters to ease liquidity and cost burdens. He urged the Union government to accelerate Free Trade Agreements (FTAs) and bilateral arrangements to offset tariff risks.
He also sought a special financial relief package, including a moratorium on principal repayments, similar to measures implemented during the COVID-19 period, citing Brazil’s example of tax deferrals and credits for exporters.
