Jewellery exporters in SEZs on edge after US imposes high tariffs

Time of India

9 hours ago

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Jaipur: Over 200 jewellery manufacturers operating from two special economic zones in Jaipur are facing challenges following the US announcement of tariffs exceeding 50% on exports.
Unlike other exporters who also serve domestic markets, these units rely solely on exports as they cannot sell to retailers within the country. Most of the units export to US markets.
Many fear that if the logjam is not resolved promptly and extends into Sept, they will have to strategically release the workforce. Christmas orders are generally finalised by the end of Sept, but the proposals for new orders have come to a halt.
Rajiv Jain, former chairman of the Gems and Jewellery Exports Council, said, "Everybody is hopeful that the stalemate will be resolved. But if that doesn't happen, it will be a very difficult situation for factories operating out of SEZs."
Making a comparison with the manufacturers operating from general industrial areas and also exporting, he said units based in SEZs cannot enter the domestic market. "The non-SEZ units will somehow survive as they have scope to expand in the domestic market.
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But not the units in SEZs. While we do not think of layoffs currently, it will be hard not to do that if the tariff uncertainty is not resolved," he added.
Currently, about 35,000 workers are engaged in both special economic zones in Sitapura in Jaipur. The govt can intervene and salvage the situation if it wants in a negative scenario. Currently, the units in the SEZ are not charged gold import duties like the manufacturers, who pay the duty.
Jain said, "If the govt allows them to supply in the domestic market with only the import duty of the gold used in the items, not on the whole price of the ornament, then some relief can come through." However, he is hopeful that both countries will find a way, but it has to be quicker. "We have already lost a good amount of time. The loss of production in August can be managed with extra shifts. After that, it would be difficult to avoid losses," he said.
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