Mumbai: India’s $32 billion gems and jewellery industry is preparing for a significant drop in exports as the United States enforces a steep 26 percent reciprocal tariff, posing a challenge to trade with its largest market.
The unexpected tariff hike announced as part of President Donald Trump’s global trade policy, is expected to severely impact India’s jewellery exports, which rely heavily on the US market.
Industry leaders warn that the steep duty will make Indian jewellery significantly less competitive in one of its most crucial markets.
India is the world’s largest hub for diamond cutting and polishing, processing nine out of every ten diamonds globally. The US alone accounts for nearly $10 billion, or 30.4 percent of India’s annual gems and jewellery exports.
The sector is a key driver of employment in India and ranks as the country’s third-largest export to the US, following engineering and electronic goods.
However, the industry has already been facing headwinds due to weak demand from China, contributing to a 14.5 percent decline in exports in the 2023-24 fiscal year, bringing total overseas sales down to $32.3 billion.
With rising concerns over the impact of tariffs, industry leaders are pinning their hopes on a long-term bilateral trade agreement between India and the US. Negotiations for an early trade deal are underway, and experts believe a resolution could provide much-needed relief.
“We’re pretty hopeful that India could land a trade deal with the US in the next few months. So, we just need to push through this tough phase for a little while longer,” said Shaunak Parikh, Vice Chairman of the Gem and Jewellery Export Promotion Council (GJEPC).
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