Key highlights of US tariff's impact with respect to the Consumer and Retail sectors

On Wednesday, 2 April 2025, US President Donald Trump announced reciprocal tariffs on India.

We present the key highlights with respect to the Consumer and Retail sectors:

• The US has issued an Executive Order on Reciprocal Tariffs, imposing additional ad-valorem duties on imports from all trading partners. The additional tariff levied on India is 27%.
• Impact on the Gems and Jewellery sector: India's Gems and Jewellery sector is highly dependent on exports, with the US being a major market. A slowdown in China, changing consumer preferences, the rise of lab-grown diamonds, soaring gold prices, and increased competition from other countries have all contributed to volatility in the sector in recent years. The imposition of US tariffs adds another layer of complexity, potentially leading to market and margin erosion. The sector hopes the Government of India addresses these tariff concerns through a potential bilateral trade deal with the US.
• Impact on the Textile and Garments sector:  The imposition of US tariffs on the Textile and Garments sector presents a mixed bag for the Indian textile industry. While it offers a competitive advantage over other exporting nations that have faced higher tariff rates, it also poses challenges related to the risk of market and margin contraction, as well as increased costs. The industry's future growth will depend on its ability to innovate, adopt sustainable practices, and overcome existing challenges. The sector also hopes to secure a strategic advantage through the inclusion of textile and garments under a potential "zero for zero" rate in a bilateral trade deal with the US.

Please note that this is a developing issue, and the analysis will evolve subject to new information.