By Rhea Mogul and Esha Mitra, CNN

New Delhi (CNN) — Two decades ago, Jinul Abedeen left his family and moved to India’s capital where he spent a year learning Zardozi, an ancient and intricate threadwork technique he hoped would equip him to support his family for decades to come.

The gamble succeeded. He landed a job at Orient Craft, a major garment factory on the outskirts of New Delhi that supplies global brands like Gap, Ralph Lauren, and American Eagle. For 12 years, he has created pieces destined for clothing racks 8,000 miles away in the United States.

“This is a true skill,” he said, recalling that year spent learning his craft when he lived on his meagre savings, as his needle moved across a sheer piece of fabric to form a flower petal. “Otherwise, it would not take a year to learn.”

Now, that hard-won livelihood, is threatened by a force beyond his control.

On Wednesday, the White House imposed 50% tariffs on Indian goods – some of the highest the US has imposed on any of its trade partners in what is already a historic global trade war – threatening to decimate business that depends on Indian exports like textiles, diamonds, steel and automobiles

Half of the 50% levies are Donald Trump’s punishment for India’s ramped-up purchases of Russian oil following Moscow’s invasion of Ukraine. The other half are part of Trump’s signature “American First” campaign to reduce US trade deficits – in the case with India, $45.7 billion in 2024.

Both are clashing with the “Make in India” dream of fellow populist Indian Prime Minister Narendra Modi, who envisions turning his country into a manufacturing powerhouse to power economic growth and lift millions out of poverty.

As India’s biggest export market, the US is – or at least was – a big part of that dream.

On the floor of Orient Craft, which exports about 82% of its products to the US, gloom is settling in.

“It has caused a lot of difficulties, and the company is in trouble,” Abedeen said. “If the company is in trouble, we are in trouble. If the country is in trouble, we are in trouble.”

It’s a problem Modi can’t afford, with tens of millions of young people already struggling to enter the job market in the world’s fastest growing major economy.

‘Worse than Covid’

Neeraj Pandey has been at the factory for 22 years. From his modest monthly income of about $205, he has funded his daughter’s MBA and his son’s master’s degree. But the new tariffs threaten to unravel his life.

“We could lose everything,” he said. “Our employment will be gone.”

For Sumitra Devi, working at Orient Craft’s factory in the neighboring state of Jharkhand was more than a job. “Women from my village don’t usually work. I was a housewife,” she said.

Her factory earnings changed everything. She put her children through private school, and now her elder daughter dreams of becoming an engineer. For Devi, a school dropout, this is a “matter of pride.”

Now, she fears that new tariffs could erase it all.

“My husband’s salary isn’t enough,” she said. “If I lose my job, the girls will have to go back to a government school… and my daughters are so proud. They say, ‘Look, my mother works.’”

Pandey and Devi’s stories cut to the heart of a grand national ambition: Modi’s “Make in India,” a strategy built on making goods domestically to sell to the world.

Launched in 2014, this flagship program is central to the Indian leader’s political brand, built on promises of national pride and future greatness for the nation of 1.4 billion. The government has poured more than $26 billion into incentives for sectors like apparel, to reduce India’s reliance on imports and create a manufacturing powerhouse.

While there have been shortfalls – manufacturing’s share of GDP is stalled at 17% – it has undeniably elevated India on the world stage, offering a real alternative to China for some investors and consumer brands.

Orient Craft’s owner, Sudhir Dhingra, called this period “very challenging.” Some orders from American buyers have already been put on hold, he said.

Hemant Makhija, who heads the fabrics department at Orient Craft, estimates some 20 million workers at cotton mills across India could be out of a job.

“Mills across the national capital region are already operating at 50% capacity despite this being peak season,” he said.

Ajay Srivastava, a former trade official who runs New Delhi’s Global Trade Research Initiative, predicts the levies will hit export hubs hard, with US orders worth $5.4 billion likely to plummet by 60% to 90%.

For Dhingra, the human cost is the most alarming part.

“It’s very painful (for the workers) to sustain their families,” he said. “This is worse than Covid.”

A need to diversify

The western city of Surat is the epicenter of the global diamond industry, a massive processing hub, where skilled artisans handle about 90% of the world’s rough diamonds, polishing them to make them ready for the global market.

The sector, which employs about 5 million people nationwide, contributes about 7% of the country’s GDP, according to the India Brand Equity Foundation (IBEF).

“The US remains highly dependent on Indian diamonds,” said Jayantibhai Savaliya, regional chairman of the Gem and Jewellery Export Promotion Council in India. “Any slowdown will have a 100% impact, potentially leading to job losses and salary cuts.”

While recent shipments provide a temporary buffer, he expects exports to decline significantly over the next eight months, calling the situation a “wake-up call” for the industry to diversify its markets.

Under his turbocharged “America First” foreign policy, Trump has prioritized his own national interests, economic self-sufficiency, and sovereignty – much like Modi, his nationalist counterpart in New Delhi.

The position seeks to reshore manufacturing to the US. But in doing so, it could sacrifice Washington’s long-standing courtship of New Delhi as a vital counterweight to China’s growing influence in the Indo-Pacific region.

The primary source of friction is the US trade deficit with India, which has widened significantly over the last decade, even as bilateral trade has roughly doubled.

The US was India’s largest trade partner as of 2024, yet India ranked tenth in the list of US trading partners for the same year. The bilateral trade between the US and the world’s most populous nation was $129.2 billion in 2024, a record for the partnership.

The high levies could effectively erase India from the US in some key markets like garments, Srivastava, from the Global Trade Research Initiative, said.

It “makes Indian garments uncompetitive against Vietnam’s 20% and China’s 42%,” he added, “leaving little chance to retain US buyers.”

Still, he noted while tariffs will hurt export-heavy sectors like apparel, textiles, jewelry and seafood, these form about 20% of India’s GDP – with US exports counting for a fifth of that.

“Strong domestic demand, 6–7% growth, and ongoing reforms… will cushion the impact, preventing a systemic crisis,” Srivastava said, adding: “India may face short-term pain, but its vast domestic market will cushion the blow, enabling a quick rebound.”

?The anxiety has nevertheless made Dhingra from Orient Craft begin to think of alternatives.

“Russia is an unexplored market. I would say parts of Europe, we could grab business there? We could also go to South America, which we have not done,” he said. “But my worry is that it (the tariffs) will leave a very deep scar in the Indo-American relationship.”

Modi not backing down

While many nations have rushed to strike trade deals with Trump to lower tariffs, Modi has been less willing to cave.

New Delhi called the tariffs “unfair” and “unjustified,” pointing out the hypocrisy of Trump’s move, noting that the US and Europe still buy Russian fertilizers and chemicals.

Earlier this month Modi said India “will never compromise on the interests of farmers, fishermen and dairy farmers.”

“I know personally, I will have to pay a heavy price for it, but I am ready for it,” he added.

To mitigate the impact, the government has announced some countermeasures, including suspending import duties on raw materials and accelerating trade talks to diversify export markets.

But for regular factory workers, this means little.

“If my job goes away, I have no other work. I don’t know how to do anything else,” Pandey said.

“If they can come to a compromise, that would be better. If not, what can we do?”

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Ayushi Shah contributed reporting.