India-US Tariff War: Trump tariff creates big crisis for handicraft makers of Bagru, goods worth crores stuck in factories

India-US Tariff War: As soon as the mobile phone kept on the office table rings, a spark of hope appears in Ashok Maru's eyes. But after listening to the call, this hope turns into despair. Obviously, this was not the call he had been waiting for since the last two-three weeks. This happens to Ashok Maru several times throughout the day. This is not only his condition, but that of thousands of exporters of Rajasthan, whose business has been badly affected after the Trump tariff.

Orders stopped, goods stuck

The biggest problem is being faced by those exporters who had orders. They made a big investment and also prepared the goods on time, but the sudden tariff imposed by Trump changed the situation. Customers refused to buy goods at increased prices. As a result, goods worth crores of rupees got stuck in factories and warehouses. Neither the old goods are being sold, nor new customers are being found.

Bagru's Industrial Area: From buzzing to sad

Bagru Industrial Area, which was once buzzing with the hustle and bustle of handicraft, terracotta, paper work, garment, stone and furniture manufacturers and exporters, is now immersed in silence. Most of the goods from this area used to go to America, but after the tariff, the employment of at least 5-6 thousand people has been affected here. This number reaches around 7 lakhs in the whole of Rajasthan.

Till a few weeks ago, there was noise of machines and movement of workers here. Now there is silence in most of the blocks. Due to lack of work, many workers returned to their villages in the last three weeks.

Story of Ashok Maru

Earlier 25-30 people used to work in Ashok Maru's furniture factory. Now only 4-5 are left. He says, “After the Trump tariff, no buyer is buying goods at 50% (25%+25%) higher price. Buyers are asking for discounts from exporters, and exporters are asking for discounts from us. We are helpless, so are they. Our orders are on hold, all the money is stuck.”

Maru further explains, “People say, find a new market. Where to find a new market overnight? The labour also understands everything. After the news of tariff came, when the goods started stopping, most of them went to their villages. The little labour that is left is local and is somehow arranging livelihood for their families by doing small jobs.”

The condition of handicrafts and other industries

Not only furniture, the condition of handicrafts and other industries is also bad. Deva, who works in Ashok Maru's factory, says, "Many of my colleagues have lost their jobs. Their families are on the verge of starvation. We are artisans, this is the only work we know. Now many people are ready to work as daily wage labourers, but there is no way out."

Varun Lalwani, general manager of Global Surfaces Limited, a company that exports stone to the US, says, "The worst thing is that most of the orders have been put on hold. We can somehow survive on 25% tariff, but we cannot bear 25% penalty. So far we have not fired even a single employee, but we also do not know for how long we can maintain this situation."

Challenges for new businessmen

This period is even more difficult for new exporters. Handicraft trader Harsh Singhi, who after studying engineering from IIT left a good job and started this business by taking a loan from the bank, says, “I got a big order in November-December. Somehow I arranged the money and completed the work by working hard day and night, but the order got cancelled at the last moment. I have to give huge discounts even on the goods under production. In competition, the profit is not enough to give 50% discount. Even recovering the cost of the goods is becoming difficult.”

Impact on transport and logistics

The impact of Trump tariff is not limited to manufacturers only. Custom agent and transporter Hitesh Sharma (name changed) says, “I had taken a loan from the bank and bought four trucks, which used to deliver the goods of the exporters to the Con-Cor Logistics Center in Jaipur or Mundra Port. Now all four trucks have stopped. It is becoming difficult to pay the salaries of the drivers. The bank is threatening to take away the vehicles if the first installment is missed.”

According to an official associated with Con-Core, earlier 378 containers used to go from Jaipur to America every week. Between 26 and 31 August this number decreased to 218, and between 1 and 6 September it was halved. Now most of the containers are going for animal feed.

The challenge of new market

Rakesh Gupta, Vice Chairman of the Center for Development of Stones (Cedos) says, "People easily say find a new market. But years of hard work builds business. This does not happen overnight. If we had a new market, why would we wait for the tariff to increase?"

Navneet Jhalani, Co-ordinator of Rajasthan Handicraft Exports Joint Forum says, "There was talk of relief of Rs 26 thousand crore in the news, but even after three weeks there has been neither any denial nor any announcement. Such unconfirmed information is increasing our problems."