It’s Diwali season — a five-day period when Hindus around the world commemorate the triumph of light over darkness on the Indian subcontinent centuries ago. But the colorful Diwali celebrations held annually in Indian-American communities throughout the United States are more muted this year compared to the past. The reason? Prices on everything from saris to spices have skyrocketed since August 27. That was the day President Trump imposed 50% tariffs on goods imported from India.
The tariffs are pounding the hundreds of South Asian-themed stores here in Iselin and in neighboring Edison, which collectively represent “Little India.” On a recent tour along the area’s Oak Tree Road (the subject of an Emmy-nominated documentary directed by Indian-American journalist Rohit Vyas and his daughter Aditi), store owners shared their tariff-induced tales of woe.
At Subzi Mandi, a South Asian supermarket, a manager says the store has been “empty” since the tariffs were imposed, with sharp declines in buying of rice, flour, oil, and noodles. “People are not shopping the way they used to,” he says, noting less foot traffic in the store, with customers only purchasing what they need day-to-day, not in bulk.
The story is the same at Reema Jewelers, a retail store on Oak Tree Road. The owner, Ashok Sethi, has been in business for more than 30 years and 90% of his customers trace their ancestry to India. He says the tariffs, which have also contributed to the price of gold rising to more than $4,200 per ounce (up from $3,382 on August 26), have triggered price increases of nearly 40% in his store.
Buying gold is typically a Diwali tradition, but he’s experienced a 60%-70% decline in sales, with people leaning toward individual jewelry pieces and not entire sets. When his customers look at something they want to buy, he says they “get completely astonished to see the new price.”
Tariffs taking a real toll
The owner of Aanchal Saris in Iselin, Pradip Sangari, told us the tariffs have been particularly painful in the runup to Diwali, which is typically the store’s busiest period. But the pain will persist after Diwali as well. Sounding like a disciple of Milton Friedman, Mr. Sangari says, “anytime is not a good time” for tariffs.
New Jersey’s governor, Phil Murphy, who just returned from his second trade mission to India, told us in a recent interview that he’s seen how the tariffs are “taking a real toll” on Oak Tree Road businesses.
Mr. Sethi, the jeweler, said if he could talk to President Trump, he would tell him, “Tariffs might sound like a quick fix, but they often hurt American consumers and small businesses. The real way to build strength is by investing in our people, our factories, and new technology so we can compete globally on quality.” He adds that, “our margins have diminished considerably. It’s hard for our business to survive.”
That challenge is mounting as large India-based jewelry retailers, like the Tata-owned Tanishq, also open stores on Oak Tree Road. Such retailers don’t have the longstanding ties to, and trust with, the local community that are fundamental to Oak Tree Road’s success. One of us (Angela) worries about the long-term viability of the Indian grocery store where she takes her mom to shop.
The tariff story is not limited to Oak Tree Road. Angela just returned from four weeks in India and met with business leaders, senior government officials, and investors in six major cities. They spoke about how India’s economy has suffered from trade tensions with the United States — and how changes to the H-1B visa program are upending plans for skilled Indians to find work at American companies. There was also speculation about trying to derisk through reduced investment in the United States — an outcome that could harm both economies.
A deep, maybe irreparable rift
There’s an attempt to look on the bright side — some Indians see these changes as slowing the “brain drain” to the United States. But there’s also sadness about a deep rift — some characterize it as “irreparable” — with a country that is home to approximately 4.5 million people who trace their ancestry to India (more than in any other country) and that for decades has been a beacon of hope and opportunity. It’s a place where Indians have been able to prosper to such an extent that they have one of the highest household incomes ($151,200) of any ethnic group in the country.
Some of that wealth can be traced to the success of Indians working in the technology industry. But it also stems from those who operate small businesses — whether a sari store in Iselin or a motel in Mississippi. And those business owners contribute to the vitality of the U.S. economy, while also strengthening the bonds with their ancestral home.
These ties of commerce and kinship are just part of the reason why Antony Blinken, as Secretary of State, said the U.S.-India relationship was “among the most consequential relationships of any in the world.”
Governor Murphy echoed this sentiment in our interview: “This is too important a relationship not to get right … We belong together.” He’s instituted $500 million in tax incentives for India-based companies that create jobs in New Jersey because he’s seen the positive impact other such companies — from HCLTech to TCS — have had in his state.
Diwali is a time for celebration, but also reflection — on how to navigate challenges and seize opportunities — and there are plenty of both right now for Indians and for Indian-Americans. The holiday also commemorates the triumph of knowledge over ignorance centuries ago. What’s needed now is a modern-day triumph of knowledge — one that ends taxes on immigrant entrepreneurs and restores the U.S.-India relationship to where it needs to be.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
