Welcome to yet another edition, chief! Since Friday is a holiday for 78th Independence Day, we’re sending our weekly newsletter a day earlier. We wish you a wonderful holiday!

In today’s edition — Markets may be discounting the impact of US tariffs, but for some sectors such as textiles and jewellery, this could be an uppercut of sorts, a real jab in the belly. The fear is that this might inevitably lead to job losses in thousands and ceding of ground to international competitors such as Ecuador. Meanwhile, an eyedrop is coming up soon that could make reading glasses redundant.

Textile may Lose Its Shirt, Jewellery Its Sheen

Vishwas Ved

Financial markets are often guilty of brushing off bad news, betting that things will get better before the damage really bites. 

That’s been the approach so far with Washington’s decision to slap a 50% tariff on most Indian goods — double the already-steep 25% announced earlier. 

Headline forecasts of a 0.35 to 0.6 percentage point hit to GDP have dominated the chatter, giving the impression that the economy will take only a modest knock. 

But those headline numbers hide the real story: 

For certain sectors, this may not just be a small papercut. It could be a deep wound that could take years to heal.

Economists at HDFC Bank have said that if the 50% tariff holds, GDP growth could be trimmed by 40 to 60 basis points from their baseline 6.3% forecast for FY26. 

Likewise, Goldman Sachs and Moody’s have put the drag at around 0.3 to 0.6 percentage points, while UBS expects a 35 to 60 basis point impact over FY26–27. 

These numbers, however, are economy-wide averages. And they coldly understate the real experience of industries now staring at massive order losses and job cuts.

That’s what happens when you average out the pain. It looks survivable and within manageable limits. And it might be that way for the economy, but not for all sectors. As a matter of fact, some exporters may not even survive the tariff wounds.

Trouble in Textiles

Take textiles and garments, for example. The tariff shock could be brutal here. The US is India’s biggest buyer of readymade garments, taking around a third of the country’s exports in this segment. 

The Apparel Export Promotion Council (AEPC) has already warned that doubling tariffs to 50% will be the “death knell” for micro and medium-sized apparel exporters heavily dependent on the US market.

Some have recommended shifting production to lower-tariff nations, such as Bangladesh, Vietnam, and Ethiopia. But it’s not that easy. Relocating could take years, not weeks. 

Even large exporters like Pearl Global, which supplies to Gap and Kohl’s, are scrambling to use overseas facilities to bypass US duties. 

That’s an option for Pearl only because it already has 17 factories outside India. But for tens of thousands of small units in the country, there is simply no Plan B.

AEPC has also made it clear that without direct fiscal support from the government, job losses could run into the hundreds of thousands. That’s not just a random conjecture. That’s a real livelihood crisis.

Gems & Jewellery in Jeopardy

If textiles are staring at a jobs crisis, gems and jewellery are bracing for a market collapse. 

The sector is already feeling the heat, with the effective duty on exports to the US now at 31.5% and set to jump to 55.5% after August 27. 

Industry think tank GTRI warns that exports in this category could plunge by 50–70%, as buyers turn to lower-duty suppliers like China and the UAE.

The danger isn’t just lost revenue. This is a sector that sustains millions of livelihoods, from artisans to small workshop owners. 

Once US retailers switch sourcing for high-value, design-sensitive products like diamond jewellery, winning that business back could take years. 

Final Words

Markets are fond of arguing that the hit to GDP is small, so the damage is manageable. But at 25% tariffs, many exporters already found the US markets unviable. Doubling that to 50% — or even hypothetically to 100% — doesn’t only upset the economics, it also shuts the door completely. 

Seafood is another example. Tariffs here could climb to nearly 58%. That kind of hike makes Indian seafood uncompetitive overnight, handing over market share to countries like Ecuador, which face duties of just 15%.

In that sense, the percentage doesn’t matter: the market is gone. 

At 25% tariffs, many exporters were already out of the race. At 50%, the math becomes insignificant.

₹7,100 crore

That’s the amount top 300 business families earn every day. The 2025 Barclays Private Clients Hurun India Most Valuable Family Businesses List has crowned the Ambani family as the nation’s most valuable family enterprise for the second year in a row, with a valuation of ₹28.2 lakh crore — equal to roughly a twelfth of India’s GDP. The second edition of this annual list has grown bigger and richer, adding 100 new entrants to cover 300 families, who together control a combined $1.6 trillion (₹134 lakh crore) in value.

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—China asks companies not to use Nvidia chips. China has urged its  companies to avoid using Nvidia Corp.’s H20 processors, particularly for government-related purposes, complicating the chipmaker’s attempts to recoup billions in lost China revenue as well as the Trump administration’s unprecedented push to turn those sales into a windfall. Over the past few weeks, Chinese authorities have sent notices to a range of firms discouraging use of the less-advanced semiconductors.

—Ford invests $5B to build affordable EVs. Less than two weeks after announcing its electric vehicle unit lost $1.3 billion during the second quarter and expected to lose billions more this year, Ford Motor Co. now plans to invest around $5 billion to reset its EV program with more affordable vehicles produced more efficiently, at lower cost, the automaker announced this week. The key to the strategy is reinventing the process Ford first invented 122 years ago that changed the way vehicles have been built ever since—the assembly line.

—Microsoft to kill its Lens PDF Scanner app. Microsoft has confirmed it will be pulling its mobile document scanning app, Lens PDF Scanner, which was formerly launched as Office Lens in 2015. The company is now pointing users towards Microsoft 365 Copilot for scanning. From September 15, 2025, the app will be retired from iOS and Android devices, and removed from the respective app stores two months later. From December 15, scanning within the pre-installed app will be disabled, but existing scans will still remain accessible..

ICYMI | ChatGPT is Jobless

Missed last week's update? Two recent High Court rulings reminded both GST authorities and taxpayers that rules aren’t optional. From audit procedures to input tax credit claims, due process must be followed. Meanwhile, your favourite ChatGPT didn’t get the job it applied for because it “lacks depth”. Its competitor, Claude, walked away with it. Read all about it in The Odd Bit.

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