The Kerala government will need the Union government’s support in overcoming the after-effects of the huge tariffs imposed by the United States on imports from India, Kerala Finance Minister K.N. Balagopal told the Assembly on Tuesday (September 16, 2025).
Replying to a calling attention motion moved by CPI(M) MLA P.P. Chitharanjan, Mr. Balagopal said he has apprised the Union Finance Minister of the difficulties faced by people working in various sectors in the aftermath of the tariffs. The issue has also been brought to the attention of the 16th Finance Commission, he said.
He said urgent measures such as expediting IGST refunds, ensuring energy subsidies and providing interim relief packages to workers in the various sectors have been proposed. Diversifying export markets, shifting from dollar-based exchange rates to rupee-based trade arrangements for exporters, branding support and collective bargaining power to exporters, opening trade-friendly centres in non-U.S. countries, and ensuring necessary support for small and medium enterprises to meet international standards require strategic interventions, for which the support of the Union government is required.
The U.S.’ new tariff policy, unveiled by President Donald Trump, will affect exports from sectors such as seafood, spices, cashew nuts, coir and tea. About 12-13% of India’s seafood exports are from Kerala. The 20-25% additional tariffs increases the total duty burden on shrimp to more than 33%. This has led to cancellation of orders from the U.S., accumulation of stocks in cold storages and a reduction in the utilisation rate of processing facilities to less than 20%. The majority of the workers involved in shrimp processing are women, whose livelihoods will be directly threatened. It will create massive job losses in the coastal region. The survival of small and medium processing units will be threatened, he said.
More than 80% of India’s pepper exports come from Kerala. The gradual increase in existing duties to 50% will weaken Kerala’s competitiveness. Exporters have reported a 6% drop in orders in the months since the tariff announcement. Products from countries such as Vietnam and Indonesia are also posing a major threat to Kerala in this regard. In the traditional sector, cashew, coir and handlooms are also facing tariff threat. Kerala’s tea exports, worth about ₹700 crore annually, are closely linked to the U.S. market. There has been a sharp decline in orders from there. It is assessed that the U.S. tariff policy will have social impacts on Kerala beyond trade figures and income losses, as our export sectors are embedded in local communities, said Mr. Balagopal.
Published – September 16, 2025 04:16 pm IST
