Mumbai: The recent decision by the US to impose a 50% tariff on imports of gems and jewellery from India has sent shockwaves through the sector, raising fears of job losses and weakening India’s global competitiveness. Despite this, shares of industry leaders like Tata’s Titan have seen modest gains, while other players are struggling. Experts call for immediate government action to counter the impact and safeguard jobs.
Impact of US Tariffs on Indian Gems and Jewellery
The gems and jewellery sector in India, valued at a staggering $10 billion, plays a crucial role in the economy, contributing 40% of the US market. However, with the recent imposition of a 50% tariff on imports, concerns have risen about the future of this export-driven industry. Industry insiders are apprehensive, asserting that this decision could lead to significant job losses and reduced competitiveness on a global scale.
In the wake of the tariff announcement, the US has escalated its previous 25% tariff to a striking 50%, challenging the viability of Indian goods in one of its largest markets. This increase has put exporters on high alert, as they navigate potential disruptions and increased difficulties in maintaining their market share.
Mixed Reaction from the Market
Despite the grim news, some stocks in the gems and jewellery sector displayed resilience in Thursday’s trading session. Tata Group’s Titan saw a rise of 1.15% to reach ₹3,635.20, while Kalyan Jewellers experienced a modest increase of 1.34%. Yet, not all companies shared this positive trend; Senco Gold, Bluestone Jewellery, and others saw declines in their stock prices, with losses ranging from 0.40% to 1.57%.
This mixed reaction is indicative of the uncertainty faced by the sector. Analysts speculate that while some companies might weather this storm, smaller firms might struggle for survival, highlighting the need for immediate support from the government.
Experts Raise Alarm Over Job Losses
Kirit Bhansali, Chairman of the Gem & Jewellery Export Promotion Council (GJEPC), expressed serious concerns about the potential fallout from these tariffs. He noted, “The US is our largest market, and exports during April-July 2025 had already declined 32% year-on-year to USD 2.12 billion. With the new tariff in place from August 27, we fear exports to the US could fall by over 75%, impacting polished diamonds, jewellery, and coloured gemstones alike.”
Bhansali’s warnings underscore the urgency for government intervention. If left unaddressed, these tariffs could spell disaster for the industry, especially small and medium-sized enterprises that rely heavily on US exports. The potential for widespread job losses in this labor-intensive industry is a concern that resonates with many stakeholders.
Future Strategies for Exporters
Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL), weighed in on the looming challenges. “This may lead to a decline in export volumes, order cancellations, and margin pressures for exporters,” he mentioned. Kothari emphasized that the imposition of tariffs could severely affect the price competitiveness of Indian jewellery in the American market.
To mitigate the negative impacts, exporters may seek alternative markets, focus on value-added products, or actively lobby for government support. Though no easy remedy exists, the industry’s shift towards innovative offerings could present new avenues for growth.
Looking Ahead: A Call for Support
As job losses and financial uncertainties threaten to loom large, stakeholders in the gems and jewellery sector are urging the government to take swift and supportive action. The potential for significant declines in export volumes requires immediate attention, not just from the government but also from industry leaders willing to innovate and adapt.
The ramifications of these tariffs could extend beyond economic impacts, affecting thousands of families dependent on the sustainable growth of the gems and jewellery sectors. As the situation evolves, all eyes will be on how industry players confront this challenge and the role that policymakers will play in mitigating the fallout.
Amidst the turbulence, one thing is clear—this moment could reshape the future of India’s prestigious jewellery industry. The need for resilience, adaptability, and support has never been more crucial as exporters brace for what lies ahead.
Bankerpedia’s Insight💡
The 50% tariff on Indian gems and jewellery by the U.S. poses a significant threat to India’s $10 billion export sector, with projections of a 75% drop in exports. This disruption could exacerbate job losses and hamper the financial health of SMEs, crucial players in the industry. As the sector braces for instability, investors must remain vigilant and consider diversifying portfolios. For those connected to this industry, it’s imperative to seek alternative markets and adapt by innovating products to mitigate risks from heightened tariffs.
What Does This Mean for Me?🤔
- Salaried Person → Job insecurity and potential income reduction for salaried individuals.
- Business Owner → Increased costs and reduced competitiveness for exports.
- Student → Job market uncertainty, affecting future employment opportunities.
- Self-employed → Increased costs could reduce demand for self-employed jewelry makers.
- Homemaker → Higher jewellery prices may strain household budgets significantly.
- Retiree / Senior Citizen → Possible decrease in retirement savings due to market instability.
- Job Seeker → Potential job losses in the gems and jewellery sector.
- Farmer / Rural Citizen → Fewer job opportunities and reduced income for rural citizens.
Research References📚
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