Strategies for HR and Compliance Teams to Protect Workers and Maintain Compliance Amidst Rising US Tariffs on Indian Goods

On August 7, Reuters reported that U.S. tariffs on Indian goods had increased by an additional 25%, effectively nearing 50% for some items. This development sent U.S. buyers scrambling and put pressure on Indian exporters to either absorb the costs or shift their capacity. Apparel giants like Pearl Global can pivot to Bangladesh, Vietnam, or Indonesia. However, smaller vendors that operate only in India face the migration of orders and thinner profit margins, particularly when many clusters such as Tiruppur and NCR are already battling labour shortages and gaps in upskilling. Markets have been shaken, and policy rhetoric has hardened. Beneath this macro noise lies a human story: uncertain orders have led to unpredictable shifts, a freeze on hiring, and precarious take-home pay for tens of thousands of workers.

For HR and compliance heads in export units, the next 30-60 days will be a test of resilience. They should prepare for accelerated redeployments, requests for voluntary time-off, or a reduction in overtime. This is where statutory compliance, encompassing wages, overtime, notice periods, and PF/ESIC, collides with liquidity stress. It's imperative to create a “tariff response” playbook that includes micro redeployment and reskilling, transparent shift bidding, floor-level town hall meetings, and vendor-financing conversations that explicitly protect payroll. Additionally, underpayment risk should be monitored with red-flag dashboards. Document everything, as labour officers will not accept “tariff shock” as a valid defence for wage delays or unsafe throughput targets. If it becomes necessary to flex capacity offshore, a fair transition plan for impacted workers should be published, not just a press line.

The question arises: what people-first levers, like redeployment, cross-training, staggered overtime, and hardship funds, can best protect workers when trade shocks hit suddenly? And how can compliance teams ensure that any production ramp-downs do not result in wage, overtime, and safety obligations being "traded off" for delivery?

In the face of trade shocks, HR and compliance teams can employ several strategies to protect workers and maintain compliance:

1. Redeployment and Cross-Training: Redeploy workers to other areas of the business where their skills can be utilized. Cross-training can also be beneficial, equipping employees with a broader set of skills that can be used across different areas of the business.

2. Staggered Overtime: Instead of a blanket reduction in overtime, consider staggering overtime. This means different teams or departments can have their overtime reduced at different times, minimizing the overall impact on take-home pay.

3. Hardship Funds: Establish a hardship fund to provide financial assistance to workers most affected by the trade shocks. This can help alleviate immediate financial stress for these employees.

4. Transparent Communication: Maintain open lines of communication with employees. This includes explaining the situation, what the company is doing to mitigate the impact, and what employees can expect in the coming weeks and months.

5. Monitoring and Documentation: Keep a close eye on wage, overtime, and safety obligations to ensure they are not being compromised. Document all actions taken in response to the trade shocks. This will be crucial in demonstrating compliance with labour laws and regulations.

6. Fair Transition Plans: If offshoring becomes necessary, develop a fair transition plan for affected workers. This could include severance packages, job placement assistance, or retraining programs.

Remember, it's important to consult with legal counsel and labor experts to ensure all actions are in compliance with local and national labor laws.