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After tariff shock, India's apparel and jewellery industries fear for US orders

Industry executives say that India's apparel exporters and jewellers are preparing for a decline in orders and the potential of job cuts after U.S. president Donald Trump announced on Friday a 25% tariff against Indian imports.

They said that several garment exporters who had hoped to reach a bilateral deal with the United States and were prepared for an increase in orders from U.S. retail outlets such as Walmart and Costco have now stopped their expansion plans while they wait for the result of negotiations.

Welspun Living and Gokaldas Exports are among the key garment exporters that make up to 70% of their sales in America. The higher tariffs may cause orders to be diverted to Vietnam which has a 20% lower U.S. duty.

India's biggest market for clothing and jewellery is the United States, which will account for nearly $22 billion worth of exports by 2024. India holds a 5.8% market share in the U.S. clothing market, trailing only China, Vietnam, and Bangladesh.

"We were preparing for expansion and expecting 10%-15% of tariffs under the U.S. agreement," said Gautam Nir, director at Matrix Design and Industries Pvt Ltd., a subsidiary from India's biggest garment exporter Gokaldas Exports.

Gokaldas U.S. customers include GAP and Walmart.

Nair stated that Trump's announcement of tariffs was a surprise, and the 25% duty, if implemented, would severely impact India's exports. He added that India's clothing sector faces higher costs already than its leading competitors Bangladesh or Vietnam.

"IMMENSE PRESSURE" In Tirupur a textile hub of southern India, exporters are relying on bilateral trade agreements to end the uncertainty.

Both countries continue to hold talks in an effort to reach an agreement.

Cotton Blossom India's Naveen Michael, who is the executive director, said that if U.S. businesses decline, factories would start stealing each other's clients. Cotton Blossom India supplies Walmart and Bass Pro Shops.

India's jewellery and gems sector is also under pressure, as it relies heavily on U.S. customers. The 2024/25 fiscal-year saw the lowest exports of polished and cut diamonds in almost two decades due to weak demand from China and the United States.

Nearly a third of India's annual gem and jewellery exports to the U.S. totals $28.5 billion.

Kirit Bhansali is the chair of the Gem & Jewellery Export Promotion Council.

Exporters urge the government to restore stability in the U.S. before September so that they can ramp up their seasonal production.

Without a deal on trade, the exports of jewellery in Surat, India’s diamond polishing hub, will not recover.

We'll have to reduce production and job numbers.

(source: Reuters)