Indian Exporters Turn To Domestic Markets As US Tariffs Hit Gems And Apparel Industries

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US Tariffs Impact Indian Exporters

The recent tariffs imposed by the United States on imported goods have significantly impacted Indian exporters, especially in the gems and jewellery and apparel sectors. These industries are now shifting their focus to domestic markets to minimize losses.

Gems and Jewellery Industry Faces Major Shift

The gems and jewellery industry is India’s second-largest export sector to the US. Of the nearly $10 billion worth of exports to the United States, around $3-4 billion is expected to be diverted either to other countries or to domestic consumption.

The All India Gem and Jewellery Domestic Council has announced plans to boost domestic demand through shows and exhibitions ahead of Diwali. Jewellers are targeting sales of 18-20 tons of gold on Dhanteras and 150 tons over the next three months.

Apparel Industry Faces Compliance Challenges

The apparel industry is also heavily affected, as the United States accounts for about one-third of all Indian apparel exports. Unlike gems and jewellery, the apparel sector faces difficulties in diversifying to other international markets because of different compliance requirements and varying consumer preferences.

Domestic Market Now Better Organized

Industry leaders believe that India’s domestic markets have improved significantly in recent years. They are now more organized and professional, with larger players making it easier for exporters to pivot their businesses within the country.

However, there are some challenges. For example, the higher GST on premium apparel could reduce consumer spending, affecting the ability of exporters to recover losses domestically.

A Strategy Inspired by the Swadeshi Movement

This shift towards domestic markets mirrors the historical Swadeshi Movement during colonial times, which promoted self-reliance and local production. By focusing on domestic consumption, Indian exporters are reviving an age-old strategy to counter modern trade challenges.

Key Takeaways

US tariffs have significantly hit Indian exports in gems, jewellery, and apparel.
Gems and jewellery industry expects $3-4 billion worth of exports to shift to domestic markets.
Jewellers target 18-20 tons of gold sales on Dhanteras and 150 tons over the next three months.
Apparel industry struggles to diversify due to compliance and consumer differences.
Domestic markets now more professional, but GST on premium goods may hurt spending.