Reuters    •   5 min read

India's garment and jewellery sectors fear for US orders after tariff shock

WHAT'S THE STORY?

By Manoj Kumar, Rajendra Jadhav and Dhwani Pandya

NEW DELHI/MUMBAI (Reuters) -India's apparel and jewellery exporters are bracing for a drop in orders from their biggest market and could cut jobs after U.S. President Donald Trump announced a 25% tariff on Indian imports starting on Friday, industry executives said.

Several garment exporters, who had hoped for a bilateral trade deal and were preparing for a rise in orders from U.S. retailers such as Walmart and Costco, have now halted expansion plans

AD

as they await the outcome of negotiations, they said.

Key garment exporters including Welspun Living, Gokaldas Exports, Indo Count and Trident, make 40%-70% of their sales in the United States. Higher tariffs could shift orders to Vietnam, which now has lower U.S. duties of 20%.

The United States is India's largest market for garment and jewellery, with nearly $22 billion in exports in 2024. India has a 5.8% share in the U.S. garment market, behind China, Vietnam and Bangladesh.

"We were getting ready for expansion, expecting 10%-15% tariffs under the U.S. deal," said Gautam Nair, director at Matrix Design and Industries Pvt Ltd, a subsidiary of India's largest garment exporter Gokaldas Exports.

Gokaldas U.S. clients include GAP, Walmart and JCPenney.

"Trump's tariff announcement has come as a shock, and if implemented, the 25% duty will severely impact exports," Nair said, adding that India's apparel sector already faces higher costs than leading competitors Bangladesh and Vietnam.

'IMMENSE PRESSURE'

In Tirupur, a textile hub in southern Indian concerns are mounting, with exporters pinning their hopes on a bilateral trade deal to put a quick end to the uncertainty.

The two countries are still holding talks in a bid to reach a deal.

"If U.S. business declines, factories will start poaching each other's customers," said Naveen Michael John, executive director at Cotton Blossom India, which supplies Walmart and Bass Pro Shops.

India's gems and jewellery sector, also heavily reliant on U.S. buyers, is already under pressure. Exports of cut and polished diamonds sank to their lowest in nearly two decades in the 2024/25 fiscal year due to weak U.S. and Chinese demand.

The U.S. accounts for nearly one-third of India's $28.5 billion in annual gems and jewellery exports.

"A blanket tariff of this magnitude will inflate costs, delay shipments, distort pricing, and place immense pressure on every part of the value chain - from lower level worker to large manufacturers," said Kirit Bhansali, chair of the Gem & Jewellery Export Promotion Council (GJEPC).

Looking ahead to the U.S. holiday season, exporters are urging the government to find a way to restore stability before September, giving them time to ramp up seasonal production.

"Without a trade deal, exports won't recover," said one jewellery exporter in Surat, India's diamond-polishing hub.

"We'll be forced to cut production and jobs."

(Reporting by Manoj Kumar, Rajendra Jadhav, Dhwani Pandya;Editing by Helen Popper)

AD
More Stories You Might Enjoy