The industrial heartbeat of Gujarat, Surat, is witnessing a surge of optimism following the United States' decision to slash total tariffs on Indian imports from 50 per cent down to 18 per cent. This move is expected to breathe new life into the textile and diamond industries, which had been reeling under punitive trade measures since mid-2025.
In August 2025, the US had imposed two distinct 25% tariffs on India - one citing the trade deficit and another as a penalty for Russian oil purchases. However, following high-level discussions between Prime Minister Narendra Modi and Donald Trump, a compromise was reached.
According to textile expert Ranganath Sharda, the 50 per cent tariff had essentially priced Indian fabrics out of the American market, allowing competitors like China, Bangladesh, and Vietnam to dominate.
"The reduced tariffs are expected to bring a significant boost. We anticipate the textile trade could grow exponentially as we regain our competitive edge in the US market," Sharda said.
The gems and jewellery sector also saw a staggering decline as a result of Trump-imposed tariffs, with exports plummeting from $10 billion to nearly $5 billion.
Dinesh Navadiya, President of the Indian Diamond Institute, predicts a swift recovery back to the $9–$10 billion mark. The relief extends to 400–500 small jewellery manufacturers in Surat. Crucially, this is expected to reverse the trend of wage cuts and unemployment among small diamond artisans.
Trade analysts suggest that India's recent Free Trade Agreements (FTAs) with European nations played a role in "nudging" the US toward this decision. By diversifying its trade partners (including ongoing talks with the UK and Canada), India demonstrated that it has viable alternatives, prompting Washington to protect its own trade interests by easing restrictions.
The tangible effects of this policy shift are expected to manifest on factory floors and in export ledgers within the next two to three months, potentially marking 2026 as a year of recovery for Gujarat's industries.
(With inputs from Amit Thakur)
