India-US trade deal impact: Goldiam, Rajesh Exports, other gems & jewellery stocks rally up to 20%

Gems and jewellery stocks

• US-India trade deal cuts tariffs on Indian imports to 18 percent from 50 percent
• Indian gems and jewellery stocks rallied sharply after tariff reduction
• Goldiam, Rajesh Exports, and Titan shares rose significantly.

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The shares of Indian gems and jewellery stocks rallied on February 3 after India and US concluded their much-awaited trade deal, effectively reducing the latter's tariffs on Indian imports to 18 percent from the earlier 50 percent.

Several of these companies have strong exposure to US markets, deriving a major portion of their revenue from exports to the country. The sharp reduction in the tariffs boosted investor sentiment for these stocks.

India-US trade deal:

"Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25 percent to 18 percent," Trump wrote in a post on Truth Social after a telephonic conversation with Prime Minister Narendra Modi.

Trump described Modi as “one of my greatest friends” and a “powerful and respected leader of his country,” adding that the two leaders discussed trade, global security and efforts to end the Russia Ukraine war.

At 18 percent, India’s tariff rate is now lower than that of several major Asian trading partners, supporting growth in labour-intensive and export-oriented sectors such as textiles, gems and jewellery, and engineering goods, said Dhiraj Relli, MD & CEO, HDFC Securities.

"Labour-intensive sectors such as textiles, gems & jewellery and garments are likely to benefit the most," said Angel One. "Textiles, gems and jewellery, leather goods, handicrafts, toys, auto components which are not only export sensitive but also are large employers and labour intensive. For each of these sectors this along with the EU deal is a double positive as it opens up avenues to expand exports afresh with a zeal," said Anitha Rangan, Chief Economist RBL Bank.

Gems and jewellery stocks:

Goldiam International shares rallied 20 percent to hit the upper circuit at Rs 357.70 apiece. The company had strong export exposure to US markets. Earlier in September last year, it had announced that received purchase orders worth ₹100 crore for manufacturing and exporting lab-grown diamonds jewellery for international clients from the US.

Rajesh Exports shares hit 5 percent upper circuit, while Tribhovandas Bhimji Zaveri shares jumped 10 percent. Titan shares gained nearly 5 percent, while Kalyan Jewellers India shares rallied around 8 percent.

Thangamayil Jewellery shares gained 6 percent before paring gains.

International Gemmological Institute (India), which offers certification services for diamonds, colored gemstones, and studded jewelry, saw its share price jump 10 percent to hit the upper circuit at Rs 339.15 apiece.

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