India's FTAs with other nations cushion threat from US tariffs in gems & jewellery exports

New Delhi, Sep 16 India’s overall gross exports of gems & jewellery recorded a 5.12 per cent growth to $2.12 billion (Rs 18,529.08 crore) in August this year compared to the corresponding figure of $2.01 billion (Rs 16,896.04 crore) for the same period of the previous year, according to data released by the Gems and Jewellery Export Promotion Council (GJEPC) on Tuesday.

While the primary growth trigger is the rush among Indian exporters to minimise the impact of the US tariff threat, other positive elements, including Free Trade Agreements (FTAs) such as India-UAE comprehensive economic partnership agreement (CEPA, and reduced duties on imports of raw materials have also played a pivotal role, according to a GJEPC statement.

On the other hand, the overall gross imports of gems & jewellery at $1,471.85 million (Rs 12,887.18 crore) in August posted a growth of a mere 0.77 per cent compared to $1,460.56 million (Rs 12,253.84 crore) for the same period of the previous year. This rise is marginal in nature and reflects a steady demand for raw and semi-finished products back in the home country to support production for the upcoming holiday season internationally, as well as domestic festive demand, the statement said.

The overall gross export of cut & polished diamonds at $972.29 million in August declined by (-)6.29 per cent compared to $1,037.59 million for the same period of the previous year. The decline in exports of cut and polished diamonds during the month can be attributed to the rising affinity towards yellow metal in the US and Europe, where sluggish spending on luxury items caused overall demand to fall, according to the GJEPC statement.

Retailers across major markets are also witnessing a slump in sales, inflating the unsold inventory, which has slowed down new purchases. The continued increase in the global demand for lab-grown diamonds on the backdrop of being environmentally friendly and cost-effective has also eaten up some share of natural diamonds from the demand pie.

The total export of plain gold jewellery jumped by over 63 per cent to $419.51 million in August from $256.99 million in the same month of the previous year. The robust growth seen in plain gold jewellery exports during August 2025 was supported by strong demand in key markets, particularly the Middle East and the US, in the context of festive and wedding purchases, particularly strengthened by the India-UAE CEPA.

A worldwide consumer interest in buying lightweight and everyday wear led to orders being stimulated, as did international retail stock builds before festive and wedding buying later this year. Furthermore, government policy support, such as cuts in customs duties and facilitation of trade, has made Indian exports more competitive in international markets, the report added.

Kama Jewellery MD Colin Shah said: "The Indian gems & jewellery sector is evolving with sheer agility to absorb the jitters of US tariffs and economic uncertainty it has created. There were strong numbers in August showing growth and density of exports to international markets, highlighting the rush among the exporters community to conduct trade early and get saved from the tariffs."

"Parallelly, fresh opportunities as close alternatives to the US due to trade deals such as those with the UAE, and consumers are increasingly gravitating toward sustainable, premium, and custom jewellery. Highly priced gold, global volatility, and volatile metal markets are persistent challenges, but coming out of the upcoming festive and wedding season will bring new energy to the sector," he added.

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