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MSMEs in diamonds, textiles, chemicals to be most hit by US tariffs

The US tariff hike to 50% on Indian goods is set to hit MSMEs hard, especially in textiles, gems & jewellery, seafood, and chemicals. With MSMEs accounting for over 70% share in these sectors, the move will squeeze margins, reduce competitiveness, and impact key clusters such as Tirupur’s RMG hub and Surat’s diamond industry. While gems & jewellery exports worth ~$10 billion face the highest exposure, pharma remains exempt. Experts suggest diversifying exports towards the UK, EU, and other markets to offset the impact.

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The imposition of higher tariffs by the US will significantly impact micro, small and medium enterprises (MSMEs), which account for as much as ~45% of India’s total exports.

Currently, the US levies an ad valorem duty of 25% on Indian goods. However, it has imposed an additional 25% tariff that will take effect from August 27, bringing the total tariff on Indian products to a substantial 50%. The additional ad valorem, if implemented, will have meaningful impact on certain sectors and remains monitorable.

The textiles, gems and jewellery and seafood industries, which account for ~25% of India’s total exports to the US, are likely to be the most affected. MSMEs have more than 70% share in these sectors and will be hit hard. Another sector likely to face the heat is chemicals, where MSMEs have a 40% share.

Says Pushan Sharma, Director, Crisil Intelligence, “Partial absorption of the increased product prices due to higher tariffs will put pressure on MSMEs, squeeze their already-slim margins and pose a material challenge to their competitiveness. For instance, those into readymade garments (RMG) are expected to lose ground in the US as the tariff increases to 61%, including 50% additional ad valorem duty, compared with peers in Bangladesh and Vietnam tariffed at 31%. The Tirupur cluster, which accounts for over 30% of India’s RMG exports, will be severely impacted as ~30% of its exports are to the US.”

Similarly, in the gems and jewellery sector, MSMEs in Surat, which dominates diamond exports with over 80% share, will feel the tariff shock. As such, diamonds account for over half of the country’s gems and jewellery exports, and the US is a major consumer of Indian diamonds, comprising nearly a third of exports.

To be sure, the tariff hikes come at a particularly challenging time for most of these sectors. For instance, RMG exports have recovered after declining 7% on-year in fiscal 2024 and logged 13% on-year growth in fiscal 2025, albeit on a low base. The gems and jewellery sector has seen exports decline 10%-a-year over the past two fiscals on compound annual growth rate basis.

Some sectors, however, remain unscathed for now. For instance, pharmaceutical products, which comprise 12% share in exports to the US, are currently exempt from tariffs.

Of the five sectors expected to see meaningful impact, gems and jewellery has the highest exposure to the US at ~$10 billion. While we expect export volumes to contract, the impact may not be fully reflected in revenue terms because of a likely runup in gold prices and sustained domestic demand. To further mitigate the impact, India can increase exports to other countries as well as leverage the benefits of the recently concluded trade deal with the UK and a potential deal with the European Union.

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Indriya, Aditya Birla Jewellery Unveiled India’s Largest Sustainable Jewellery Rangavalli

The Installation Transformed An Iconic Jewellery Design, From Indriya’s Festive Collection Padmika, Into A Magnificent Rangavalli, A Grand Celebration For Vijayadashami.

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Indriya, Aditya Birla Jewellery, on unveiled India’s Largest Sustainable Jewellery Rangavalli, crafted from grains, at Orion Mall and Shri Sathya Ganapathi Shirdi Saibaba Temple on in Bengaluru, as a tribute to our rich cultural heritage and enduring festive traditions. Spanning 400 sq. ft. at Orion Mall and 1,600 sq. ft. at the temple, the large-scale Rangavalli installations, inspired by an iconic jewellery design from Indriya’s latest festive collection, Padmika, transform the intricate artistry of fine jewellery into magnificent expressions of a cherished cultural tradition steeped in devotion, craftsmanship and community spirit.

Padmika crafted in 22KT gold celebrated the revival of Gulabi Meenakari, a rare pink enamel craft, and the necklace featured an intricate nakshi floral detailing alongside the auspicious motif of Goddess Lakshmi seated on a lotus, symbolising prosperity, abundance and new beginnings. Reimagined as a magnificent Rangavalli using eco-friendly materials including rice, millets and seeds, the installation translated the intricate artistry of the necklace into a large-scale tribute to our cultural heritage. Bringing together thousands of individual elements, the artwork reflected the precision, patience and craftsmanship shared by both jewellery-making and Rangavalli creation. Created using grains, millets and seeds, the installation celebrated the enduring beauty of traditional art forms while offering visitors a distinctive and immersive festive experience.

Rooted in cultural authenticity, the initiative drew on the expertise of the renowned Rangoli artist Shikha Sharma popularly known as the “3D Rangoli Queen” and creator of record-breaking Rangoli artworks. By translating the detailing of an iconic temple jewellery design into Rangavalli, Indriya celebrated two art forms that shared a deep appreciation for intricate patterns, craftsmanship and the coming together of individual elements which created something extraordinary.

Sustainability was integral to the initiative and it extended the purpose of the installation beyond the festive celebration. Following Vijayadashami, the rice, millets and seeds used in the artwork were responsibly repurposed through feeding drives for birds and animals in partnership with Akhil Karnataka Prani Daya Sangh Gaushala.

Speaking about the initiative, Shantiswarup Panda, Head of Marketing & Visual Merchandising at Indriya, said:

Shantiswarup Panda

“At Indriya, our endeavour is to celebrate India’s rich cultural heritage through meaningful and contemporary expressions. The Jewellery Rangavalli is an extension of that vision, reimagining an iconic Padmika design through a beloved festive tradition that resonates deeply with our audiences. As a brand inspired by culture and craftsmanship, we wanted to create an experience that not only showcases the artistry behind our jewellery but also invites consumers to engage with it in a memorable and immersive way. Through this initiative, we celebrate heritage, craftsmanship and the spirit of togetherness that lies at the heart of Vijayadashami.”

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