New Delhi [India], April 4 : US President Donald Trump's 27 pc tariff on gems and jewellery industry will cause a disruption in the industry as US is one of the major exporting destinations for India, says Industry experts.
The US accounts for nearly one-third of India's USD 32 billion gem and jewellery exports. With the new tariffs, products like cut and polished diamonds, which previously faced no duty, will now attract 27 per cent tariff.
Gold and platinum jewellery will face 32-34 per cent duty, while silver jewellery could be taxed as high as 40.5 per cent. Other items such as lab-grown diamonds and imitation jewellery will also see significant hikes, going up to 38 per cent.
According to Ramit Kapur, Managing Director of GSI India, the hike will hurt major categories like cut and polished diamonds and studded gold jewellery, which constitute a large share of exports.
However, he added that "Despite the challenges, high-value studded jewellery will remain resilient, as discerning US buyers prioritize quality, craftsmanship, and certificationareas where India excels. However, pricing and competitiveness will be pressured, requiring Indian manufacturers to adapt. Demand for studded jewellery continues to be robust, but this tariff change calls for quick action by policymakers as well as industry captains to ensure India continues to lead the global jewellery market".
Rajesh Rokde, Chairman, Gem and Jewellery Council of India (GJC) said "Tariffs are more than economic measures; they redefine the dynamics of trade partnerships. The gem and jewellery sector, with its reliance on delicate global collaborations, faces challenges that call for strategic foresight. It's not just about navigating the cost but understanding how these shifts recalibrate the competitive landscape globally,."
However, Saurabh Gadgil, CMD of PNG Jewellers, said domestic businesses like his won't be impacted as India does not import jewellery from the US. He added that the tariff hike may also hurt the US economy, as it imports many goods from Asia that will now become costlier, potentially leading to inflation and slower growth.
He said, "More importantly, this policy will affect the entire world, and not just the United States. Thus, reciprocal reactions are awaited and Indian players need to see how this unfolds in the days to come"
Experts also warn that Indian exporters, especially small businesses, may lose share in US markets to other countries not facing these duties. They urge quick action from Indian policymakers to protect the country's leadership in the global gems and jewellery trade.
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