Two of India’s top foreign exchange earners, the gems & jewellery and textiles sectors, have seen contrasting impact from the Trump administration’s tariff decision.
In gems & jewellery, orders from the US have declined by 70 per cent since April 5 when the 10 per cent baseline tariff came into effect, forcing the units in Mumbai’s Santacruz Electronics Export Processing Zone (SEEPZ) to send about 50,000 contract workers on leave, said industry executives. But in Tamil Nadu’s Tirupur, the knitwear capital of India, textile and apparel units are flooded with enquiries and orders as US buyers seek to lift stocks before Trump takes his next call on reciprocal tariffs. While he has suspended the additional reciprocal tariff of 26 per cent imposed on India for 90 days, the tariff on China, the largest supplier of garments, was increased to 145%.
Exporters in the two sectors elsewhere in the country too have seen similar trends.
US importers bought jewellery, mostly studded, to create inventory as everyone was anticipating the reciprocal tariff to become effective from April 9, said Adil Kotwal, president of the SEEPZ Gems & Jewellery Manufacturers’ Association. The US had previously levied a 5.5 per cent on jewellery imports.
“Now the US buyers have gone on a wait-and-watch mode until the final tariff is announced after the 90 days,” he said. “The exporting units in SEEPZ are now trying to step up deals with Saudi Arabia, Europe and Australia. But the volume of shipments to these three countries cannot be compared with the US, which is a huge market for us.”
Nearly USD 2 billion worth of jewellery is exported from SEEPZ, Mumbai, annually. “In the current fiscal year, exports will be halved,” said Kotwal.
India’s gems and jewellery exports totalled USD 28.5 billion in fiscal 2025, down 11.72 per cent from FY24. The US accounted for USD 10 billion of India’s FY25 exports.
The situation is different in the textile and apparel industry.
Because of the high US tariffs on China, many US buyers are looking at India as an alternative sourcing nation and Tirupur units are getting a lot more enquiries than previously from global brands, said KM Subramanian, president of the Tirupur Exporters Association. “The US buyers are keen to lift the garments at the earliest.”
The US imports about USD 120 billion of textile and apparel annually with China accounting for a quarter of this at USD 30 billion, said Sanjay Jain, managing director of TT Ltd that exports textile and knitted garments. “This USD 30 billion worth of textiles and garments will have to be mostly sourced from other countries, which gives India a great opportunity. Apart from garments, home textiles is a sector in the US, where India can make its presence felt,” he said.
