A dual challenge of softening US demand and unpredictable tariff structures is creating severe operational strain across India’s export-driven manufacturing sectors. Two key industrial hubs, Noida’s garment manufacturing sector and Surat’s natural diamond cutting and polishing cluster, are bringing in widespread austerity measures, downsizing their workforces and extending holiday shutdowns to limit margin erosion.
Buyers Delay Orders or Demand Steep Discounts
US buyers are either delaying long-term commitments or demanding steep 20–30% price discounts to absorb potential tariff costs. This forces Indian factories to absorb overheads while their revenue stays locked.
Surat’s Diamond Units Stretch Diwali Closures
Surat’s diamond polishing units have extended their traditional Diwali holiday closures to 25 days this year, compared with 15 days the previous year
Approximately 300 small-scale diamond cutting and polishing units have shut down operations over the past six months
Demand Drivers Behind the Slump
Weakened retail consumer demand across the United States
Persistent macroeconomic softness and subdued order volumes from China, another primary export market
The combination of cautious US buyers, tariff uncertainty, and weak demand from China is putting sustained pressure on export-led manufacturers in both the diamond and apparel sectors.