Handicraft exports hit by US tariff uncertainty

Although the US has paused its plan to levy a 26% duty on Indian imports for 90 days, Bengaluru’s handicraft businesses are already feeling the heat from shifting global trade dynamics. With the US accounting for 30–70% of their export markets, many stores have reported a sharp decline in new orders.

In early April, the Trump administration announced steep reciprocal tariffs on imports from around 60 countries — including a 26% levy on Indian goods — to boost domestic manufacturing and jobs. The move was quickly deferred to July 9 to allow for negotiations. A 10% baseline tariff still applies to most nations. China is excluded from the suspension and faces tariffs of up to 145%.

‘Stocks in warehouses’

Exporters of high-end handicraft items say business has crashed since the announcement, as clients adopt a cautious stance. They say the proposed tariff has worsened an already sluggish market, hit by recession fears, stock market volatility, the Russia-Ukraine conflict, and a seasonal fall in foreign tourists.

At Miras Carpet Industries on Old Airport Road, 85% of sales are export-driven, with 60% going to US retailers and interior decorators. “We used to send 15–20 parcels every Monday. That’s now down to two. Kashmiri carpets worth nearly Rs 50 lakh are stuck in our warehouse as these importers are awaiting revised budget approvals from their clients,” said co-founder Mir Nawaz.

Cottage Industries Emporium on M G Road has not dispatched a single consignment to the US in over three weeks. “Earlier, we would send 5–6 shipments weekly, valued at Rs 10–15 lakh, mostly comprising Kashmiri carpets, Pashmina shawls and animal figurines in wood,” said sales representative Irfan Ahmad. He noted that 60% of their export business depends on Indian-origin buyers in the US. Even local footfall has dipped, he said, arguing that US market trends tend to influence domestic buying patterns. Nawaz concurs, adding even online domestic orders are down.

Rajasthan Emporium and Handicrafts, also on M G Road, has processed just one export order — for quilts — recently, compared to 10–15 orders per month earlier. “We’ve tried advertising, and distributing visiting cards at hotels to attract tourists,” said owner Manohar Lal.

Nearby, Chandni Gallery, which sells metal idols, is promoting new products and offering discounts online. “Our clients anticipated these changes when Trump took office. They told us to ship out everything before April. I made three times the usual sales in one month. Only 10–15% of orders are on hold,” said owner Sultan Thariani.

Other handicraft shopkeepers in the Central Business District were seen sitting idle Monday evening.
Demand for luxury products is the first to drop during economic uncertainty, they said. Most are in ‘wait-and-watch’ mode.

Jewellers see mild slowdown

The jewellery sector is faring better, though not untouched. T A Sharavana, president, Karnataka Jewellery
Association, said exports are down by 25%, as the US accounts for half of overseas sales. “Bengaluru is a major hub for temple, antique and diamond jewellery. We will write to the finance and external affairs ministries for intervention,” he said.

Vinay Devda, a member of Jewellers’ Association, Bengaluru, said the 90-day reprieve has helped, and demand for gold and silver from the Indian diaspora remains steady. “Only a few orders are on hold,” he said.

Mixed impact in other sectors

According to Satish N, a processed lentil exporter, the agri-export sector remains unaffected and could benefit if the new tariff regime takes off. That’s because tariffs on Indian goods are still lower than those from competitors Vietnam (46%), Thailand (36%), and Bangladesh (37%). High-value sectors like electronics and automobiles may take a hit, believes Satish, chairman, state industry committee, Federation of Karnataka Chambers of Commerce and Industry.

Uma Shankar of the Karnataka Small Scale Industries Association has observed the same. “Export orders for machinery have dropped by 30–40%, but daily consumable items continue to ship,” he noted.

Large textile players appear unscathed, said Anurag Singhla, president of the South India Garment Association.

Rupa Rani, president, Forum of Women Entrepreneurs, is concerned that the new policy will affect low-
volume, low-margin businesses selling soft toys, cereals, condiments, and textiles. “I already got a worried call from a woman who exports spices. She is now planning to explore new markets,” she said.