US Tariff to Hit Surat’s Textile, Diamond Exports Hard

Surat, Gujarat – With the 25% tariff announced by US President Donald Trump, India is among the top countries with highest tariff in the entire South Asia, and there will be a direct impact on the Indian economy and especially the export of textile, diamond and gem and jewelry from Surat, stated the Southern Gujarat Chamber of Commerce and Industry (SGCCI).

SGCCI president Nikhil Madrasi, said that in the year 2024-2025, a total of $86.51 billion worth of goods were exported from India to the US. Last year alone, there was an increase of 11.50 percent in total exports from India to the US. However, Wednesday’s announcement of a 25% tariff and penalty on India by the US is going to have a direct impact on exports from India to the US. Due to the US tariff, India’s total GDP growth rate is currently expected to decrease by half a percent.

According to research, following the announcement of a 25% tariff on India by the US, there is a possibility of at least 12 percent decrease in textile exports from India. Exports of an estimated $1.5 billion are likely to decrease in the textile sector, in which the biggest impact will be on MMF Textile. Surat is considered the hub of MMF Textile in the textile sector, so it will directly affect Surat.

SGCCI vice-president Ashok Jirawala said that in Surat, there are about 35,000 weavers, industrialists with 350 dye and printing mills, 200 knitters, 50 texturizers, 10 spinners and lakhs of traders are involved in the textile sector. While 18 lakh people get direct employment in the textile sector in Surat, the employment of lakhs of people will also be affected due to the tariff imposed on India by the US. Currently, the US has a trade deal with Vietnam. While there is a 20 percent tariff on products exported from Vietnam, Vietnam is likely to benefit from the tariff imposed on India in textile exports.

Textiles are exported from Bangladesh to Americas as LDC (Least Developed Country). In this regard, textile exports depend on how much tariff America imposes on Bangladesh in the coming days. If America imposes a lower tariff on Bangladesh than India, then there is a possibility of a definite decrease in textile exports from India, which will have a slight impact on textile exports from Surat.

Former SGCCI president Vijay Mewawala, said that the most serious impact of the announcement of 25% tariff and penalty on India by the US will be seen on garment exports from India. He said that although India’s tariff has been low compared to China so far, there is a possibility of a decline in the export of man-made fiber (MMF) textiles. Surat is a major manufacturing center for home textiles and fabrics. Surat’s fabric is used on a large scale in the garments made in the country, the US tariff is likely to have a direct impact on Surat’s textile industry.

He further said that about 30 percent of India’s total exports are exported to the US alone. Most of the international buyers are also based in the US. The import duty that was levied till now will now double from August 1, due to which Indian products will become expensive in the US. As a result, end users may avoid buying products imported from India and may turn to alternatives other than India.

He further said that this change in tariff will also have a direct impact on pending orders. Big buyers in America place bulk orders for textiles from India. However, due to the increase in import duties after August 1, such bulk orders are also likely to be cancelled. Due to which small and medium industries in India may have to bear the brunt. Along with this, people’s employment may also be affected.

CA Mitish Modi said that the US India tariff will also affect the exports of diamonds, gems and jewellery and specialty chemicals and pharma products exported from Surat. The diamond industry in Surat provides employment to 1 million people. Due to the tariff, along with the reduction in diamond exports, the volume of diamond polishing will also decrease. This will have a direct impact on the employment of diamond workers in the diamond industry.

He said that the export of pharma products from India to the US is worth 10 billion US dollars. The export of generic medicines is high. Apart from Surat, specialty chemicals and pharma products are made and exported in Ankleshwar, Vapi and Dahej, so the export of specialty chemicals and pharma products will be affected due to the tariff.