Uncertainty over US tariffs and declining overseas orders are putting pressure on India’s apparel and diamond export industries, forcing manufacturers to reduce operations, extend factory shutdowns and cut employment.

In Noida, the number of operational apparel units has fallen from 2,400 to 1,800 over the past six months, according to industry representatives. Apparel exports from the cluster are projected to decline to approximately ₹42,000 crore in the current financial year, compared with ₹48,000 crore in FY2025–26. Employment has also decreased from around one million workers to approximately 800,000.

Exporters say uncertainty surrounding US trade policies is disrupting order negotiations, production schedules, working capital and long-standing relationships with international buyers. Delayed orders and demands for lower prices are creating financial pressure on manufacturers who must continue meeting wages, supplier payments and factory operating costs.

Industry representatives have warned that prolonged uncertainty could push international buyers towards competing sourcing destinations, including Bangladesh, Vietnam, Indonesia and Cambodia, potentially weakening India's long-term competitiveness in global apparel markets.

The slowdown is also affecting Surat's diamond cutting and polishing industry. Manufacturers have extended their Diwali shutdowns to 25 days this year, compared with 15 days last year, amid weaker demand from the US and subdued orders from China. According to industry representatives, around 300 small diamond units have closed in the past six months.

The developments highlight the vulnerability of India's export-oriented manufacturing sector to global trade uncertainty and weakening demand, with consequences for businesses, workers and supply chains.