Priyanka Tiwari
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The United States’ decision to impose reciprocal tariffs is set to significantly impact India’s gems and jewellery export sector, which is valued at $32 billion. The U.S., India’s largest export market in this category, currently accounts for $11.58 billion—or 34%—of the country’s total gems and jewellery exports.
Product Categories at Risk
Key exports to the U.S. include:
Cut and polished diamonds: $5.6 billion
Studded gold jewellery: $2.55 billion
Lab-grown diamonds: $831 million
Silver jewellery: $320 million
Plain gold jewellery: $267 million
Tariff hikes could see previously zero-duty items like loose diamonds now facing levies up to 20%, and gold jewellery subject to duties of 5.5% to 7%, as per industry estimates.
Concerns from Industry Leaders
Experts warn that the tariff increases could reduce India's price advantage and hurt competitiveness. Adil Kotwal, President of SEEPZ Gems & Jewellery Manufacturers’ Association, noted that gold jewellery and diamonds would be most impacted.
Rajesh Rokde, Chairman of the All India Gem and Jewellery Domestic Council (GJC), emphasized that tariffs not only raise costs but also reshape trade partnerships, requiring long-term strategy and adaptation by exporters.
Colin Shah, Managing Director of Kama Jewellery, called the move a major blow, especially given India’s consistent position as a key supplier to the U.S., contributing 12.99% of America's total gem and jewellery imports in 2024.
Employment and Economic Implications
The industry, one of India's largest employment generators, particularly among MSMEs and skilled artisans, could face serious challenges. Reduced competitiveness may result in declining orders from U.S. buyers, affecting thousands of livelihoods and compelling some manufacturers to seek alternate trade routes or relocate production.
India’s Global Standing May Be Affected
Increased tariffs could give an edge to other Asian competitors like Thailand, Vietnam, and South Korea. This shift could erode India’s market share and reduce profit margins in a sector vital to the national economy.
Domestic Market Remains Unaffected
Despite the export concerns, domestic gold consumption will remain unaffected, according to PNG Jewellers Chairman Saurabh Gadgil, as India does not rely on the U.S. for gold imports.
Read More: RBI Cuts Repo Rate to 6%, Shifts Policy Stance to Accommodative Amid Global Trade Uncertainty
