Gems & jewellery exporters raise fears of job loss due to US tariffs

Indian Express

5 hours ago

India's gems and jewellery exporters, citing high dependency on the US market, have expressed fears of job losses as steep 50 per cent tariffs would make Indian exports uncompetitive, the Gem and Jewellery Export Promotion Council (GJEPC) said in a statement on Monday.
The exporters said that the US tariffs would have far-reaching repercussions across the economy—'disrupting critical supply chains, stalling exports, and threatening thousands of jobs'—as the US is the sector's single largest market, accounting for over $10 billion in exports, nearly 30 per cent of the industry's total global trade.
'A blanket tariff of this magnitude is severely devastating for the sector. There is significant dependency on the US market, as 85 per cent of exports from SEEPZ Special Economic Zone (SEZ), which provides 50,000 jobs, are directed there,' the GJEPC said in a statement.
This assumes significance as the sector has witnessed only marginal growth over the years. Exports across all the previous five years remained within the range of $35 billion to $40 billion, except for FY2020–2021 when exports plunged to $26.61 billion due to the COVID-19 pandemic.
According to a National Council of Applied Economic Research (NCAER) survey, in 2019 there were a total of 9.89 lakh units and 42.89 lakh workers in the gems and jewellery sector in India. The sector, with total exports of around $38.11 billion, accounted for 8.45 per cent of India's merchandise exports in 2022–23 and is among the top five leading foreign exchange earners for the country, the GJEPC said.
'In FY2022–2023, exports of gems and jewellery decreased by (-) 2.94 per cent to $38.11 billion from $39.26 billion in FY2021–22,' the GJEPC said.
Exporters said that competing manufacturing hubs such as Turkey, Vietnam and Thailand continue to enjoy significantly lower tariffs of 15 per cent, 20 per cent and 19 per cent respectively, making Indian products relatively less competitive in the US market.
'This imbalance, if unaddressed, could erode India's long-standing position as a key supplier to the US,' exporters said.
'We are also concerned about the possibility of trade rerouting through low-tariff destinations such as Mexico, Canada, Turkey, UAE, or Oman—undermining the spirit of legitimate trade and impacting transparency,' the GJEPC said.
The exporters asked the government to introduce a targeted scheme on the lines of Duty Drawback or a reimbursement scheme, covering approximately 25–50 per cent of the new tariffs imposed on gems and jewellery exports to the US from August to December 2025.
'This initiative aims to partially offset the impact of the new tariff structure, mitigate financial strain on exporters, reduce the risk of order cancellations, and help maintain India's market share in an increasingly competitive and price-sensitive global market,' the exporters said.
With respect to working capital facilities sanctioned, lending institutions may be permitted to allow a deferment of interest for six months, from August 1, 2025 to January 1, 2026, as was done during the COVID-19 period, the GJEPC said.
By allowing reverse job work to SEZs, the SEZ units would be able to utilise their machinery and engage their labour for the manufacture and supply of jewellery in the domestic tariff area (DTA), which could be a lifeline during this crisis. The duty should be on the value of duty foregone on the duty-free inputs used by the SEZ unit in manufacturing jewellery for the DTA,' the exporters said.
Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More