Mumbai: A recent decision by the United States to impose a 50% tariff on gems and jewellery imports from India has sent shockwaves through the country’s export-driven industry. Industry experts warn that this tariff could jeopardize jobs, undermine global competitiveness, and strain the trade relationship between the two nations. Urging the Indian government to take immediate action, they highlight the potential for dramatic declines in exports and significant impacts on livelihoods, particularly in major hubs such as Surat and Mumbai.
Impact of Tariff on India’s Gems and Jewellery Sector
The recent imposition of a hefty 50% tariff by the United States on gems and jewellery imports from India has been described as a severe blow to the industry. Kirit Bhansali, Chairman of the Gem & Jewellery Export Promotion Council (GJEPC), voiced strong concerns about the consequences. “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,” he stated.
In the fiscal year 2023-24, gems and jewellery exports to the US approached nearly USD 10 billion, underscoring the critical role this market plays in India’s economy. For thousands of artisans and workers, particularly in cities like Surat, Mumbai, and Jaipur, this market represents their livelihood. The GJEPC reports that nearly 1.7 lakh workers could be directly affected by declining exports.
The Urgency for Government Intervention
Industry leaders are urgently calling for proactive measures from the Indian government to mitigate the negative effects of this tariff. Bhansali suggested implementing a “duty drawback” or reimbursement scheme and easing working capital restrictions. He also proposed that the government allow reverse job work and limited domestic tariff area (DTA) sales within Special Economic Zones (SEZs).
These measures could provide crucial support to businesses facing immediate disruptions. Bhansali emphasized, “We urge the government to step in with urgent support measures.” Without such interventions, the survival of many small and medium enterprises in the sector could be at risk.
Warnings of Broader Economic Consequences
Rajesh Rokde, Chairman of the All India Gem and Jewellery Domestic Council (GJC), remarked that the new tariff is more than just a trade limitation; it’s a direct assault on India’s artisanal heritage. “This tariff threatens to erode decades of trust and trade relations built painstakingly with American buyers,” he noted. The ongoing concerns in the industry echo a broader fear about the potential ripple effects this tariff could have on the Indian economy.
GJC Vice Chairman Avinash Gupta warned of the macroeconomic implications as well. “The pressure on the rupee and rising gold prices will ripple through domestic markets, dampening consumer sentiment and squeezing small retailers.” He added, “We’re staring at a dual crisis: weakened global competitiveness and shrinking local demand.” Gupta believes that the government needs to recalibrate its trade strategy to shield this vital sector, which has long been a pillar of India’s economy.
A Call for Strategic Alliances
As the situation unfolds, various stakeholders are calling for the establishment of strategic alliances with international partners to diversify trade relationships. By proactively exploring opportunities in emerging markets, India can strengthen its position in the global gems and jewellery industry.
For example, countries in the Middle East and Southeast Asia could serve as new growth avenues for Indian jewellery exports. Building relationships in these regions might reduce reliance on the US and create more resilience within the industry.
The repercussions of the 50% tariff are likely to be felt far and wide, affecting not only large businesses but also artisans who depend on the export market. As the Indian economy faces these challenges, finding quick solutions will be crucial for preserving jobs and sustaining one of the country’s most cherished industries.
Conclusion: The Way Forward
With the stakes so high, it is imperative for the Indian government and industry leaders to collaborate closely to address the fallout from the US tariff on gems and jewellery. The industry’s resilience depends on swift actions, effective communication with international buyers, and a renewed focus on building strategic alliances.
Industry leaders are hopeful that constructive dialogues can lead to amicable solutions. As the global economy remains volatile, India’s gems and jewellery sector may be entering challenging times, but it is also a moment for innovation and strategic pivots. The road ahead may be fraught with obstacles, but with the right strategies, there is potential for growth and recovery.
Bankerpedia’s Insight💡
The recent U.S. imposition of a 50% tariff on Indian gems and jewellery imports is a significant setback for India’s export sector, threatening 1.7 lakh jobs and exacerbating economic pressure. With exports expected to plummet by over 75%, this could undermine India’s global competitiveness and consumer sentiment. Small retailers may suffer as gold prices rise, straining local demand. To navigate this crisis, it’s crucial for the government to implement targeted support measures swiftly. Stakeholders should stay informed, adapt strategies, and explore new markets to mitigate the fallout from these tariff barriers.
What Does This Mean for Me?🤔
- Salaried Person → Job security concerns and potential increase in living costs.
- Business Owner → Increased costs and reduced sales threaten business profitability.
- Student → Job uncertainty in gem and jewellery sector for students.
- Self-employed → Reduced demand and potential income loss for self-employed.
- Homemaker → Increased costs for purchasing gems and jewellery products.
- Retiree / Senior Citizen → Increased costs for jewellery may affect retirees’ savings.
- Job Seeker → Job market uncertainty for gem and jewellery industry.
- Farmer / Rural Citizen → Job losses and economic strain for rural communities.
Research References📚
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