Ludhiana’s export lifeline under threat, Rs 10K cr at risk amid US tariff shock

Ludhiana, state’s industrial heartbeat and one of the country’s top export hubs, is staring at a potential revenue loss of over Rs 10,000 crore as newly imposed US tariffs threaten to derail its manufacturing momentum. With over 300 companies directly exporting to the United States, the city’s core sectors — hosiery, auto parts, hand tools and machinery — are bracing for order cancellations, production cuts and job losses.

The US has announced a steep 50 per cent import tariff on Indian goods, up from the existing 25 per cent, with partial implementation already underway since August 7 and full enforcement expected from August 27.

Industry leaders warn that the move could result in immediate cancellation of export orders worth Rs 1 lakh crore, with further losses of Rs 2 lakh crore looming if the situation persists.

“Once tariffs cross 25 per cent, it’s no longer feasible for US importers to buy from India,” said Badish Jindal, president of the World MSME Forum.

“Our competitors such as Bangladesh and Vietnam enjoy much lower tariffs. It puts Ludhiana exporters at a serious disadvantage,” he said.

He said while the state’s overall exposure to the US market was moderate, the city’s export-heavy industries would bear the brunt.

India currently exports goods worth Rs 7.5 lakh crore to the US, accounting for 18 per cent of its total exports. In return, it imports Rs 3.62 lakh crore worth of goods, resulting in a trade surplus of Rs 3.88 lakh crore. The new tariffs threaten to erode this advantage and destabilise key sectors, including machinery, electronics, pharmaceuticals, garments, auto parts, leather and furniture.

Ludhiana’s hosiery and auto parts industries are expected to be the worst hit. Every year, the city exports Rs 6,000 crore worth of textile and hosiery products to the US, along with significant volumes of auto parts and hand tools.

“Our US clients have paused orders. They’re taking a wait-and-watch approach,” said Ashutosh Shukla, a garment exporter.

“Those companies that rely heavily on US buyers are going to feel the pressure.” Sanjay Bhagat, an auto sector exporter, offered a cautiously optimistic view. “In the auto sector, especially truck-trailer components, our cost of production is low — lower than China’s. The US market can’t ignore that. These tariffs aren’t sustainable in the long run,” he said while expressing hope that trade negotiations would help de-escalate the situation.

State’s overall exports to the US exceed Rs 30,000 crore annually. Garments alone account for Rs 8,000 crore, followed by fasteners (Rs 2,000 crore), electrical machinery and tools (Rs 5,000 crore), auto parts and hand tools (Rs 4,000 crore), leather goods (Rs 500 crore), sports equipment (Rs 300 crore) and agricultural implements (Rs 200 crore). All these sectors now face an uncertain future.

The situation is compounded by the rising US dollar rate, which has touched Rs 87.63. As India is a net importer and most international payments are made in dollars, the currency surge is expected to fuel inflation and increase input costs across industries.

Local exporters and trade bodies are urging the Central Government to initiate immediate negotiations with the US to reconsider the tariff hike. They also call for a review of India’s own high import duties on vehicles and auto components, which have prompted retaliatory measures from global trading partners.

“This is not only about numbers — but also livelihoods,” said a Ludhiana-based exporter.

|“Factories may shut, jobs may vanish and decades of trade relationships could unravel. We need urgent diplomatic and policy intervention,” the exporter said.

As Ludhiana’s export-oriented industries brace for impact, the city’s industrial pulse hangs in uncertainty — caught between global trade tensions and domestic policy challenges.