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Khaleej Times
a day ago
- Business
- Khaleej Times
India's garment and jewellery sectors fear for US orders after tariff shock
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 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."
South China Morning Post
17-05-2025
- Business
- South China Morning Post
India's manufacturers fear influx of cheap Chinese imports amid US-China trade war fallout
Indian manufacturers are sounding the alarm over a growing influx of low-cost Chinese goods, from yarn and steel to toys and electronics, warning that they are being priced out of their own markets as Beijing redirects more exports away from the United States Despite the US and China agreeing to steep tariff reductions last week, analysts warn that years of trade tensions between the world's two largest economies have already led to a flood of cheap Chinese goods in India and markets elsewhere, leaving local manufacturers struggling to compete. Earlier this month, the South India Spinners Association reported that at least 50 small spinning mills in southern textile hubs like Pallipalayam, Karur, and Tirupur were facing production slowdowns. Many fear further cutbacks are now on the horizon as raw material imports from China, such as yarn, undercut prices in the domestic market. People work at a garment factory in Tirupur, India's Tamil Nadu state, last month. Photo: Reuters The steel sector faces similar challenges. In December, executives from small and medium-sized steel mills, which account for 41 per cent of India's total steel output, revealed that capacity utilisation had plummeted by nearly a third over the previous six months. These mills, unable to match Chinese steel priced US$25 to $50 cheaper per tonne on average, have been forced to scale back operations and consider lay-offs, Reuters reported. The origins of this upheaval can be traced back to the US-China trade war, which began in 2017 during President Donald Trump 's first term and continued under his successor Joe Biden. By 2024, China's share of US non-oil goods imports had fallen by nearly 10 percentage points to 16 per cent, according to a report from financial services group Nomura published in April. However, China's global export share remained near an all-time high of 15 per cent, the report found, reflecting Beijing's efforts to redirect surplus trade towards alternative markets.
