South Asian Businesses Adapt to Tariff Hikes Ahead of Diwali

As the festival of Diwali approaches on November 12, 2023, South Asian businesses across the United States are grappling with the financial impact of increased tariffs on imported goods. The situation has prompted store owners and chefs to adapt their pricing strategies to maintain affordability for customers during this significant cultural celebration.

At New India Bazaar on Polk Street, Hari Bhatt manages a store that has been in his family for three decades. He observes customers struggling to decide between purchasing a bag of low glycemic-index Basmati rice and a Bengali dessert. The recent price surge on Indian imports, exacerbated by a 50% tariff, has left many families unable to afford both items. The ongoing conflict in Ukraine has also contributed to rising costs, particularly affecting the prices of essential goods.

Bhatt notes that the price of a small pack of Parle-G biscuits, a popular snack, has risen from $0.35 to $0.50, marking a 43% increase. With 90% of their inventory reliant on Indian imports, Bhatt’s family is forced to make difficult decisions on whether to absorb the costs or pass them on to customers. “It’s always tough when somebody has to put something back on the shelf,” he shares, emphasizing their commitment to finding a balance.

Managing Costs During the Festival Season

Diwali, which celebrates prosperity and the victory of good over evil, is a crucial time for South Asian businesses. Bhatt’s family has been proactive in stocking up on non-perishable items to mitigate the impact of price increases. However, seasonal items, particularly those specific to Diwali, are harder to procure in advance. Prices for traditional clay lamps, known as diyas, have jumped between 12% and 20% depending on the retailer.

To keep goods accessible, the Bhatts split the cost of the tariff between the store and the customer, deciding on a case-by-case basis how much to absorb. Bhatt remains optimistic about Diwali sales, asserting that despite the price hikes, the cultural significance of the festival will drive consumer engagement. “I think people will be a bit more aware of prices. But we Indians are joyful people. We celebrate so much and so often,” he reflects.

At Indian Spices and Groceries in the Mission, co-owners Sajad Shiek and Avik Chattopadhyay have also felt the pressure of rising costs. A pack of their popular lentils has increased from $4.99 to $5.99, representing a 20% price hike. Even after their wholesale distributor absorbed part of the tariff, they are left with little choice but to adjust prices.

Meanwhile, Manisha Gurung, who owns Manisha Fashion Collection near Chinatown, has faced similar challenges. Gurung, originally from Nepal, imports traditional Indian attire, and this year saw shipping costs rise by an additional $50 per box. “When I tell customers it’s because of tariffs, they understand. And they buy anyway because where else will they get traditional Indian clothes in the city?” she explains.

Restaurant Owners Navigate Ingredient Shortages

Restaurants are not immune to the tariff impact either. Sonu Bhamu, owner of Jalebi Street in the Upper Haight, intends to absorb increased costs for the time being. He cites the ongoing trade talks between the United States and India as a potential turning point but is particularly concerned about the unavailability of some beloved Indian ingredients.

Chef Pujan Sarkar of TIYA, a Michelin-rated restaurant, emphasizes the need for creativity in the kitchen. With imports of certain ingredients, like Java plum, becoming scarce, he has adapted his menu to utilize locally available options while preserving the essence of Indian cuisine. Similarly, Chef Srijith Gopinathan at Copra has made adjustments to his offerings, avoiding high-tariff ingredients, though he continues to import King Mackerel, despite an 18% price increase.

As Diwali approaches, the resilience of South Asian businesses is on full display. Store owners and chefs are navigating challenges with innovative solutions to ensure their communities can celebrate this cherished festival without breaking the bank. The collective effort to maintain cultural ties and provide access to traditional goods underscores the importance of these businesses in fostering community spirit during the festival season.