Thiruvananthapuram: Kerala Chief Minister Pinarayi Vijayan on Tuesday informed the state legislative assembly about the impact of the US tariff hike on the state’s economy. He was replying to a starred question raised by ruling front MLAs during the ongoing assembly session.

The US tariff increase, which raises import duties by 50% on Indian products, is expected to have a “severe and significantly adverse impact” on Kerala’s economy and export sectors. The move, effective August 2025, is considered a “heavy blow” to the state’s traditional industries.

Impact

The Chief Minister explained that the tariff hike could reduce Kerala’s trade with the US by 40% to 60%. Eight key products exported from Kerala to the US are especially vulnerable. Spices and seafood products are expected to face a tariff increase of up to 50–58%, which could cut trade by around 60%. Textiles and readymade garments will see tariffs rise from 9% to 59%, with trade likely dropping by 40%. Carpets, tea, coir, rubber products, and cashew nuts will also be affected, with tariffs increasing to 50–53% and trade potentially falling by 50–60%. The average export value of these eight products to the US over 2023–2025 was Rs 4,503 crore (US$510.56 million).

Measures taken

To tackle the situation, Kerala has already written to the Prime Minister on July 4, 2025, highlighting the potential economic impact. The state also submitted a memorandum to the 16th Central Finance Commission on September 11, 2025, requesting additional financial assistance. On August 11, 2025, the Minister of Industries convened a meeting in Kochi with representatives from various export sectors, led by K.S.I.D.C., to discuss the issue.

Experts from the State Planning Board and the Institute of Finance and Taxation have conducted a preliminary assessment of the likely impact. The government is actively monitoring developments, collecting feedback from industry representatives, and planning coordinated actions. It is also exploring new markets through bilateral trade agreements and considering special schemes for agricultural products, coir, cashew, and spices. The Chief Minister said these measures are in progress, with monitoring and industry consultations ongoing.