India's garment and jewellery sectors fear for US orders after tariff shock
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 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.
India, UK trade deal signals Modi's priorities as New Delhi eyes EU, US pacts
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.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
an hour ago
- Business Recorder
US stocks up as market shrugs off tariff increases
NEW YORK: Wall Street stocks rose early Thursday, extending an upward run as markets shrugged off a spate of fresh US tariff increases that went into effect at midnight. Under a White House policy that had been telegraphed, import duties rose from 10 percent to levels between 15 percent and 41 percent for a list of trading partners. About 20 minutes into trading, the Dow Jones Industrial Average was up 0.4 percent at 44,361.65. The broad-based S&P 500 climbed 0.5 percent to 6,379.11, while the tech-rich Nasdaq Composite Index gained 0.9 percent to 21,357.96, above its all-time closing record. Wall Street boosted by earnings, Fed rate cut hopes In the last day alone, US President Donald Trump has also announced higher tariffs on India and 100-percent levy on semiconductor companies that don't build in the United States. But investors have been embracing a view that the US economy remains on solid footing and that the impact of levies has not been as bad as feared. 'The chip tariffs certainly sound terrible on the headline,' said Steve Sosnick of Interactive Brokers. 'But there's so many exemptions … so it's perceived to be having so many loopholes that it's not bad news.' Investor mood 'has been relentlessly positive, interpreting the news flow like a glass half-full day,' Sosnick said. The early gains on Wall Street came as the Bank of England cut its key interest rate by a quarter point to four percent, the lowest level in 2.5 years. Among individual companies, Intel dropped 1.3 percent as Trump called on the chipmaker's CEO, Lip-Bu Tan, to resign after a Republican Senator raised national security concerns over his links to firms in China. Eli Lilly plunged 13.1 percent despite reporting a near-doubling of profits on higher revenues. The drugmaker also released results of clinical testing of a weight loss pill that looked positive 'on the surface,' but indicated less impact than candidates by other companies, said
Express Tribune
2 hours ago
- Express Tribune
Trump slams Intel's new boss as 'highly conflicted,' urges immediate resignation
Listen to article US President Donald Trump on Thursday demanded the immediate resignation of Intel's new CEO, Lip-Bu Tan, calling him "highly conflicted" due to his ties to Chinese firms and raising doubts about the future of the American chip icon. A change in leadership could pile pressure on the company as it pushes through a major strategic reset started by Tan that aims to slash costs by shrinking its workforce and halting construction on some of its planned manufacturing plants. Trump's comments came a day after Reuters reported US Republican Senator Tom Cotton had sent a letter to Intel's board chair with questions about Tan's ties to Chinese firms and a recent criminal case involving his former firm Cadence Design. Reuters reported in April that Tan - himself or through venture funds he has founded or operates - invested in hundreds of Chinese companies, some of which are linked to the Chinese military. "There is no other solution to this problem," Trump said in a post on his Truth Social platform, knocking shares of Intel down around 4% in US premarket trading. Intel is a key pillar of US efforts to boost domestic chipmaking and last year secured nearly $20 billion in grants and loans, the largest federal award under the 2022 CHIPS and Science Act, to subsidize leading-edge semiconductor production. Intel and Tan, who took over the CEO role in March after the ousting of his predecessor Pat Gelsinger late last year, did not immediately respond to Reuters requests for comment. An Intel spokesperson said in a statement on Wednesday that "Intel and Tan are deeply committed to the national security of the US and the integrity of our role in the US defense ecosystem." The company said it would address the matters in the letter with the Senator. The Intel CEO invested at least $200 million in hundreds of Chinese advanced manufacturing and chip firms between March 2012 and December 2024, Reuters reported in April. A source familiar with the matter had at the time told Reuters that Tan had divested from his positions in entities in China, without providing further details. Chinese databases reviewed by Reuters at the time had listed many of his investments as current, and Reuters was at the time unable to establish the extent of his divestitures. Once the dominant force in chip-making, Intel has in recent years lost its manufacturing edge to Taiwanese rival TSMC. It also has virtually no presence in the booming market for artificial intelligence chips dominated by Nvidia. To revive Intel's fortunes, Tan has set a goal of slashing the chipmaker's workforce to 75,000 people by year-end, a reduction of around 22%. Intel also vowed to take a more disciplined approach to manufacturing investment.
Business Recorder
4 hours ago
- Business Recorder
Ripple to buy stablecoin platform Rail for $200 million
Ripple will buy stablecoin payments platform Rail for $200 million, the company said on Thursday, weeks after U.S. President Donald Trump signed a law that raised expectations cryptocurrency tokens are about to enter the mainstream. Ripple, a crypto company that issues the token XRP as well as its own stablecoin called RLUSD, has invested heavily in stablecoin infrastructure in recent months. The acquisition - which will close in the fourth quarter of this year pending regulatory approvals - will enable Ripple and Rail to 'deliver the most comprehensive stablecoin payments solution available in the market,' it said. 'As regulations become more clear and the space has grown and matured, this opportunity for stablecoin payments is really ripe, and the acquisition of Rail just really solidifies our market leadership in stablecoin payments,' said Monica Long, president of Ripple in an interview. Toronto-based Rail, backed by Galaxy Ventures and Accomplice, uses stablecoins to deploy cross-border payments. It says its transactions are cheaper and can clear in just hours, compared to longer settlement times for fiat payments. Rail says on its website that the company is responsible for 10% of all global stablecoin-based payment activity. Trump in July signed a bill into law to create a federal regulatory regime for stablecoins, which analysts said could allow digital assets to become an everyday way to make payments and move money. Stablecoins are designed to maintain a constant value, usually a 1:1 U.S. dollar peg, and their use has exploded, notably by crypto traders moving funds between tokens. Ripple said in April that it would also buy multi-asset prime broker Hidden Road in a $1.25 billion deal, one of its largest acquisitions yet, which it said would enhance RLUSD's utility. Ripple launched RLUSD, a stablecoin pegged to the U.S. dollar, last year, as it sought to disrupt the market dominated by Tether and Circle's USDC.
