India’s merchandise exports are reeling from the 50% US tariff, with gems, jewellery, textiles, and other sectors hit hardest. Marine products, electronics, and engineering goods are finding new markets, partially offsetting the losses.
Gems and jewellery saw the steepest fall, claimed reports. Exports to the US dropped nearly 70% since September, after the tariff was imposed, and 34% between April and August. Their share in US imports fell to 11.5% from 18.5% in 2012, while overall contribution to India’s merchandise exports declined from 15% in FY13 to 7% in FY25.
Despite the US decline, total gems and jewellery exports fell only slightly, aided by higher shipments to the UAE, Hong Kong, and Belgium, and rerouting through Australia and Hong Kong.
Other sectors also faced challenges. Textiles, excluding readymade garments, fell slightly before September and sharply afterward.
Agricultural products grew before the tariff but declined afterward. Engineering goods, chemicals, and readymade garments initially benefited from pre-tariff shipments but declined after.
Electronics more than doubled before September and continued strong growth afterward. Petroleum and crude products rose sharply after September. Engineering goods remain the largest US export at 20.5%, followed by electronics at 17.5% and chemicals at 17.4%.
Marine and auto exports performed better. Auto components fell to the US but grew overall due to shipments to Germany, UAE, and Thailand. Marine products rose 25% in September and 11% in October, supported by higher exports to China, Japan, Thailand, and the EU. The EU approved 102 new Indian marine units, adding to 502 already eligible.
Labour-intensive sectors like cotton garments, sports goods, and leather footwear struggle to find new markets due to competition. Industry observers advised exporters not to lower prices sharply while diversifying, reports mentioned.
Diversification is providing some relief. Exports to UAE, China, Vietnam, Japan, Hong Kong, Bangladesh, Sri Lanka, and Nigeria have risen. Container shipments to the US fell sharply, while Indonesia, Thailand, and Vietnam gained. Government support includes Rs 45,060 crore, including Rs 20,000 crore in credit guarantees.
Also Read: India’s gem and jewellery exports lose lustre amid global headwinds https://www.vibesofindia.com/indias-gem-and-jewellery-exports-lose-lustre-amid-global-headwinds/
