Disruption grows in Uttar Pradesh industrial clusters due to U.S. tariffs as demand for bailout grows louder

Export union representatives and local factory owners of these cities say dense industrial clusters such as Kanpur, Firozabad, Bhadohi and Moradabad in Uttar Pradesh are causing export disruptions due to the US’s 50 per cent import duty on Indian goods, leading to stalled orders, narrowing market access and widespread job losses, especially among temporary and contract workers, with at least 25 per cent job losses at first assessment.

In these clusters, the government’s demand for bailouts increases due to fears of further declines. Among these UP clusters, Moradabad is synonymous with brass handicrafts, Firozabad with glass industry, Kanpur with leather and Bhadohi-Mirzapur with handmade carpets.

“This sector has seen a 35-50% decline in US-based orders since the tariffs. An estimated 8,000-10,000 workers, including women artisans, are affected,” Firozabad-based export promotion council member and glass manufacturer Gaurav Singla said.

Along with neighboring districts like Mirzapur, which serves as the hub of India’s handmade carpet industry and accounts for over 60% of the country’s total ₹17,000 crore exports, Bhadohi is also believed to have suffered a 30% loss as the United States alone accounts for roughly 58.6% of exports. “The situation is very bad with orders stalled, market access shrinking and widespread job losses especially among temporary and contract workers. We need a rescue package in the form of financial assistance from the government,” said Aslam Mahmoob, member of the Bhadohi-based Carpet Export Promotion Council.

In Kanpur’s leather industry, exports have fallen by nearly 20% and many tanneries are downsizing. Kanpur-based Leather Export Council Regional President Asad K. Iraq said, “Sudden and harsh tariff increase is disrupting the industry by leading to cancellation or renegotiation of existing US orders, we need bailout support with production cuts.”

Amid the crisis, the opposition Samajwadi Party (SP) demanded urgent, targeted government intervention through liquidity, wage support and new market access to prevent a temporary shock from turning into a protracted humanitarian and economic crisis in the state. “The MSME sector is the cornerstone of the economy of Uttar Pradesh and contributes more than 60% to the industrial production of the State and employs more than 90 lakh people, including skilled artisans, unskilled laborers and daily wage labourers, making them the backbone of manufacturing and exports in the State. MSMEs such as carpets, leather, brassware, glassware and ready-made garments contribute 80% of the state’s exports. Disruptions in MSMEs in Uttar Samajwadi Party (SP) spokesperson Ram Pratap Singh said that clusters in Pradesh and others like it show serious signs of danger that justify immediate, targeted intervention rather than a wait-and-see approach.

Samajwadi Party (SP) spokesperson Nasser Salim added: “Current signals point to a high risk of local socio-economic emergency in labour-intensive UP clusters, especially if disruptions continue due to pre-existing credit gaps and the high share of informal, daily wage employment in these sectors. Early, targeted interventions combining liquidity, wage support and market access are required to prevent a temporary shock from escalating into a protracted humanitarian and economic crisis.”