On the 27th local time, the United States officially began imposing a 50% tariff on products imported from India. India’s leather and diamond processing industries have been severely impacted. As U.S. clients continue to cancel orders, many factories are facing operational difficulties.
Kanpur, located in Uttar Pradesh, India, is a renowned leather processing center in the country, hosting numerous factories that produce leather bags and shoes. After the U.S. announced the imposition of additional tariffs on India, many American clients have emailed exporters to cancel orders. This has led to the shutdown of several local factories that relied entirely on the U.S. market. Many factories that are still operational are gradually shifting their products to domestic sales or exporting to other countries.
An Indian leather product exporter from Kanpur said: “All our orders with the U.S. have become invalid. Clients have informed us to stop previous orders. One American client told us to halt supplies until the tariff issue is resolved. We received the email on August 16, and the current situation is really bad.”
India’s diamond processing industry has also been impacted. As the largest export market for Indian diamonds, the U.S. accounts for one-third of India’s annual gem and jewelry exports, with an export value of approximately $9 billion. According to Reuters, over 80% of the world’s rough diamonds are cut and polished in Surat, Gujarat, India.
The new U.S. tariff policy has further exacerbated the already sluggish diamond export business. Some diamond processing factories are reducing rough diamond purchases, lowering inventory, cutting working hours to ensure cash flow, and even significantly lowering prices to maintain operations. Meanwhile, many factories are planning to move their processing operations to other countries that face lower U.S. tariff rates.
On the 26th, the Federation of Indian Export Organisations stated that higher tariffs would put about 55% of exports to the U.S. at a “price disadvantage,” thereby reducing their competitiveness in the U.S. market. Order cancellations are particularly severe in labor-intensive industries such as leather, chemicals, and handicrafts, which is expected to lead to significant job losses. The organization has called on the government to provide financial support to exporters.
Post time: Aug-28-2025