As the United States prepares to impose new tariffs on Indian exports later this month, concern is mounting across India’s job market and financial sector. While some experts warn of significant job losses in vulnerable sectors, others point to India’s robust domestic demand and recent trade diversification efforts as buffers against the worst impacts. Meanwhile, the Indian stock market has shown surprising resilience, with several top companies seeing their valuations surge even in the face of global uncertainty.
The tariffs, announced by US President Donald Trump, are set to affect key Indian exports such as textiles, gems and jewellery, auto components, and agriculture. According to The Economic Times, experts estimate that between 200,000 and 300,000 jobs are at immediate risk, with the labor-intensive textiles sector alone potentially losing up to 100,000 jobs if the tariffs persist beyond the next six months. The threat is particularly acute for micro, small, and medium enterprises (MSMEs), which form the backbone of India’s export supply chains.
Yadav, a sector analyst cited by The Economic Times, emphasized the gravity of the situation: “In the gem and jewellery sector, including units in Surat and SEEPZ in Mumbai, thousands of jobs are at risk due to reduced demand and cost escalation in the US market.” The potential for widespread layoffs is real, especially in industries heavily reliant on the American market. Beyond textiles and jewellery, electronics, auto components, leather, footwear, shrimp, and engineering goods are all bracing for impact.
But not everyone sees a jobs apocalypse on the horizon. Balasubramanian Anantha Narayanan, Senior Vice President at TeamLease Services, offered a more optimistic perspective, noting that India’s economy is driven primarily by domestic consumption rather than exports. “At this point in time, we aren’t seeing any signs of a slowdown or loss of jobs. This also by extension means that our jobs are largely in service of domestic demand too, with the exception of some sectors like ITeS among others,” he told The Economic Times. He pointed out that Indian exports to the US total $87 billion—about 2.2% of India’s GDP—with key sectors like pharmaceuticals and electronics less exposed to the new tariffs.
“Even if these US tariffs do come about, we’ll definitely figure out a way of redirecting or diversifying our trade to other markets. Therefore, at this point in time, we aren’t seeing any signs of a slowdown or loss of jobs. It’s an evolving situation and we’ll get to know more in due course of time,” Narayanan added, highlighting recent free trade agreements (FTAs) with the UK and other nations as potential lifelines.
Still, the mood among exporters is tense. Aditya Mishra, Managing Director and CEO of CIEL HR, described the US tariff scenario as “unsettling for Indian exporters, especially in sectors that are heavily dependent on the American market.” He noted that even industries outside the direct scope of the tariffs—such as pharmaceuticals—are feeling the pinch due to rising costs of upstream chemicals and materials. According to Mishra, “While widespread layoffs appear unlikely at this stage, companies are already in cost-containment mode, reducing discretionary spending, streamlining production, and freezing hiring. The immediate pressure will be on temporary and contract roles, particularly shop-floor workers, artisans, sales and logistics staff, and some mid-level managers in export-led units.”
This cost-containment mindset is expected to ripple through the entire MSME ecosystem, which collectively accounts for a large share of India’s employment. Global capability centres (GCCs), which handle back-office and IT services for multinational corporations, are also likely to proceed cautiously with hiring and investments until the trade landscape becomes clearer.
The uncertainty is being compounded by broader global trends. As Mishra observed, “The slowdown in jobs growth is much more due to the overall slowdown in global demand and consumption, uncertainty around tariffs, and geopolitical conflicts in various parts of the globe.” This confluence of factors has left companies hesitant to make bold moves, instead opting for prudence while awaiting further developments in trade negotiations.
Yet, in a twist that might surprise some observers, the Indian stock market has managed to shrug off much of the tariff-induced anxiety—at least for now. According to Goodreturns, five of India’s ten most valued firms added nearly Rs 60,675 crore to their market capitalization in the week ending August 15, 2025, as the market recovered from initial losses following the tariff announcement. The Sensex surged by around 360 points, while the Nifty 50 rose by nearly 12 points over the same period.
Among the biggest gainers, State Bank of India’s shares rose 0.55% to close at Rs 826.7 per share, boosting its market capitalization by Rs 20,445.82 crore to Rs 7,63,095.16 crore. HDFC Bank’s shares climbed 0.61% to Rs 1991 per share, with its valuation increasing by Rs 14,083.51 crore to Rs 15,28,387.09 crore. Infosys, the IT giant, saw its shares jump 1.5% to Rs 1,447.45 per share, adding Rs 9,887.17 crore to reach a market capitalization of Rs 6,01,310.19 crore.
Bharti Airtel and Reliance Industries Limited also posted gains, with Airtel’s market capitalization rising by Rs 8,410.6 crore to Rs 10,68,260.92 crore, and Reliance’s by Rs 7,848.84 crore to Rs 18,59,023.43 crore. Not all companies fared as well, however. LIC, Bajaj Finance, ICICI Bank, TCS, and Hindustan Unilever all saw declines in their valuations as investors recalibrated their portfolios in the wake of the tariff news.
Despite the volatility, some analysts remain bullish on Indian equities. Jefferies’ global head of equity strategy, Christopher Wood, told The Economic Times that Trump’s tariffs should not be a reason to sell Indian stocks. In fact, he suggested the move could represent a buying opportunity, stating, “It is only a matter of time before Trump backs off the stance.”
Market sentiment, it appears, is being shaped by a mix of caution and optimism. Investors are weighing the immediate risks to export-driven sectors and jobs against the longer-term strengths of India’s domestic market and its ability to pivot to new trading partners. The government’s recent FTAs, along with the sheer size and dynamism of India’s internal economy, offer some hope that the country can weather the tariff storm without catastrophic job losses or a prolonged market downturn.
For now, uncertainty is the order of the day. Companies are tightening their belts, workers in affected industries are bracing for potential layoffs, and investors are watching closely for any signs of escalation—or resolution—in the ongoing trade dispute. As negotiations continue and the global economic picture evolves, the resilience of India’s economy, workforce, and markets will be put to the test.
With the tariff regime set to take effect in the coming weeks, all eyes are on the next moves from both Washington and New Delhi. The stakes are high—not just for exporters and investors, but for millions of Indian workers whose livelihoods hang in the balance.
