India, Sept. 5 -- Indian exports to the US now face 50% tariffs. No other country in Asia has tariffs this high. Many leaders of the ruling dispensation have attempted to downplay the impact of these tariffs on Indian businesses by stating that India is a domestic consumption-led economy and that Trump's tariffs will not have a significant impact domestically. However, the reality could be very different. The immediate impact can be gauged from the stock market, where benchmark indices closed August in the red. This is part of an overall sentiment of under-confidence, which was also demonstrated in the massive outflows by Foreign Institutional Investors (FIIs), who have preferred other emerging markets. In terms of the direct impact on trade, the tariffs affect about two-thirds of India's $86.5 billion annual exports to the US (impacting close to $60 billion worth of exports). Labour-intensive industries such as textiles, apparel, gems and jewellery, seafood, and leather will be impacted significantly, creating further stress on the already extremely grim employment levels. Even by the most forgiving estimates (which mask underemployment and exaggerate insecure temporary livelihoods), 18% young urban (qualified) Indians are without work; the number is significantly higher in rural areas. The hit of Trump's tariffs on labour-intensive sectors is only going to hurt India's youth more. The tariffs have had a particularly painful impact on Rajasthan. The state accounts for almost 60% of gems and jewellery exports, 60% of handicrafts exports, and 30% of readymade garment exports to the US. The impact of Trump's tariffs is immediately noticeable in the drop in shipping containers, from about 378 20-foot equivalent units (TEU) recently in Jaipur to 209 TEU - a 45% fall. The dry port in Jodhpur registered a decline of 75%, dropping from 100 TEU to 25 TEU. Rajasthan's handicrafts sector employs around 700,000 people, making the state the second-largest exporter of handicrafts in India. The gems and jewellery industry employs around 300,000 people. These jobs face a tremendous risk from the tariffs, which can have a cascading effect on the state's economic landscape by affecting allied industries. The pain is most acutely felt by smaller businesses and MSMEs that often secure loans against export orders and now face a scenario where they will be unable to repay these loans owing to order cancellations arising from increased tariffs. The telling aspect about the entire disruption is the government's unpreparedness to tackle the issue. Ever since Trump has come into power, he has publicly advocated his preference for imposing tariffs on emerging economies that are net exporters to the US. His tariff announcements of April 2 unmistakably signalled further tariffs impending. Since then, multiple rounds of talks for a trade deal between India and the US have failed. Despite the clear warning signs, we saw no concrete strategy in place by the government to protect domestic businesses in view of these inevitable tariffs. A reactive approach vis-a-vis a proactive one is going to hurt. The government could have announced adjustments to the GST framework well ahead of when it actually did, so that impacted businesses could formulate a strategy with concerned stakeholders to absorb the initial impacts of these tariffs. The government is yet to implement its Export Promotion Mission, which could have helped address the immediate liquidity crunch that MSMEs and smaller businesses likely face. There could have been additional financial cushions in the form of loan repayment moratoriums, targeted credit lines, and remissions on levies. Employment generation is well short of the number of jobs that an economy and a population like India requires. There has been a failure of diplomatic foresight and commercial navigation, which has made market diversification for Indian businesses an imperative - something that could have been done much earlier by signing new investment treaties and trade deals with European, African, Latin American, and Asian markets. This would have reduced the reliance of the impacted industries on the US - thereby limiting the impact of Trump's tariffs. The government has been unable to walk the talk on structural and regulatory reforms. Policy's reactive posture has now left our small businesses to fend for themselves, having to deal with the full-blown impact of Trump's tariffs. This could lead to thousands of business closures and serious job losses. With strategic thinking, a collaborative endeavour, and pre-emptive action, this could very well have been averted....