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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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Bhima Gold Unveils Ashtalakshmi Coin Collection for Akshaya Tritiya, Blending Devotion with Exquisite Design

A culturally rooted, insight-led launch that reimagines festive gold buying through storytelling, symbolism, and spiritual relevance.

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In a move that blends cultural storytelling with product innovation, Bhima Gold has unveiled its Ashtalakshmi Coin Collection for Akshaya Tritiya – positioning gold not just as a purchase, but as a deeply symbolic expression of prosperity, faith, and intent.

Timed with one of India’s most significant gold-buying occasions, Akshaya Tritiya, the launch reflects a deeper cultural shift in consumer behaviour. While the festival continues to drive strong purchase intent, there is a growing preference for meaningful, purpose-led buying experiences over purely transactional consumption.

Aligned with this evolving mindset, the Ashtalakshmi coin collection has been thoughtfully conceptualised to blend tradition with deeper symbolism. Inspired by the eight sacred forms of Goddess Lakshmi, each coin represents a distinct dimension of prosperity—from wealth and nourishment to courage, knowledge, and continuity.

By bringing together Adi Lakshmi, Dhana Lakshmi, Dhanya Lakshmi, Gaja Lakshmi, Santana Lakshmi, Veera Lakshmi, Vijaya Lakshmi and Vidya Lakshmi, the collection reframes gold coins from being a generic festive purchase to a story-driven, culturally immersive product experience – one that resonates across generations and belief systems.

This launch also aligns with Bhima Gold’s larger centenary narrative of “Together Purever,” which focuses on legacy, shared traditions, and evolving consumer meaning. The collection becomes an extension of that philosophy – reinforcing how heritage brands are reinterpreting tradition for a more aware and emotionally driven consumer.

Customers can pre-book their favourite jewellery by paying just 10% in advance & get their jewellery on Akshaya Tritiya at the lowest rate, which gives customers more flexibility and helps them plan their purchases with greater confidence, especially at a time when gold prices are high.

Akshaya Tritiya has traditionally been associated with intention, belief, and the aspiration for prosperity, extending beyond a purely transactional act of buying gold. The Ashtalakshmi Coin Collection has been conceptualised to reflect this deeper cultural and spiritual significance, with each coin designed to carry a distinct meaning and sense of purpose. The initiative also aligns with evolving consumer preferences, where there is a noticeable shift towards jewellery that offers emotional, cultural, and spiritual resonance in addition to intrinsic value.

With gold prices near record highs and consumer sentiment becoming more considered, Bhima’s Ashtalakshmi Coin Collection signals a broader shift in the category — from price-led promotions to meaning-led engagement, where design, storytelling, and cultural relevance drive both differentiation and demand.

As legacy brands navigate a new era of conscious consumption, Bhima Gold’s latest offering highlights how tradition can be reimagined as experience, making gold buying not just an act of investment, but an expression of identity and belief.

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