US tariff a big blow for gem and jewellery sector, say industry experts

News18

6 days ago

Mumbai, Jul 31 (PTI) The US move to impose 25 per cent tariffs on Indian imports comes as a big blow for gems and jewellery sector, which is heavily dependent on exports and one of the biggest contributors to the country's economy, industry experts said on Thursday.
'The US announcement of a sweeping 25 per cent tariff on all Indian goods, along with vague penalties affecting strategic ties, is a deeply concerning development. The Indian gem and jewellery sector, in particular, stands to be severely impacted. The US is our single largest market, accounting for over USD 10 billion in exports, nearly 30 per cent of our industry's total global trade," Gem and Jewellery Export Promotion Council (GJEPC) Chairman Kirit Bhansali said in a statement.
He said, a blanket tariff of this magnitude will inflate costs, delay shipments, distort pricing, and place immense pressure on every part of the value chain — from small karigars to large manufacturers.
'We recognise the need to address trade imbalances, but such extreme measures undermine decades of economic cooperation. We urge the US administration to reconsider, and call on both governments to engage in constructive dialogue that safeguards bilateral trade and protects the millions of jobs that depend on it on both sides," he stated.
All India Gem and Jewellery Domestic Council chairman Rajesh Rokde said the high tariff on Indian goods along with a penalty is likely to have a major impact on India's exports to the United States.
'Most importantly, American companies looking to penetrate the Indian market through the 'Make in India' policy will be impacted badly.
This tariff will have a more significant impact on the US compared to India, affecting around USD 9 billion in business. Handcrafted jewellery is expected to be particularly affected in the US market. India may try to convince President Trump to roll back the tariffs until a final deal is achieved expeditiously," he added.
Kama Jewelry MD Colin Shah said with the US being one of the key export destinations, this will severely impact the sectors like gems and jewellery that are heavily dependent on exports and is one of the biggest contributors to the economy of the country.
'The gems and jewellery industry of India has been bearing the brunt of the prolonged geopolitical tensions between Russia-Ukraine and Middle East for almost over 2 years. Further, with the return of Trump into power, his tariff threats have impacted Indian markets due to their ambiguous outlook.
'Going ahead, we expect trade activities to remain muted with the US," he said.
However, there is a need to wait and watch to see how the situation unfolds post the sixth round of India-US Bilateral Trade Agreement talks that will take place in August end with US counterparts on their arrival in India, added Shah.
RiddiSiddhi Bullions (RSBL) Managing Director Prithviraj Kothari said the imposition of a 25 per cent US tariff on Indian jewellery exports could reduce domestic players' price competitiveness in the American market, which is one of the largest export destinations for gems and jewellery.
'This may lead to a decline in export volumes, order cancellations, and margin pressures for exporters. Small and medium-sized enterprises (SMEs), which form a large part of the sector, could be hardest hit. The industry may also face job losses and liquidity challenges. To mitigate the impact, exporters may explore alternate markets, focus on value-added products, or seek government intervention for relief," Kothari added. PTI SM HVA
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