India’s gems and jewellery industry will be hit hard by US President Donald Trump’s move to impose a 25% tariff on imports from the country, industry executives said on Wednesday.
Colin Shah, MD, Kama Jewelry said going forward, trade activities from the sector will remain muted with the US. "The recent announcement by Trump to impose 25% tariffs along with a penalty for purchasing arms and energy from Russia comes as a big blow for India. With US being one of the key export destinations, this will severely impact the sectors like gems and jewellery that are heavily dependent on exports and are one of the biggest contributors to the economy of the country," Shah said.
India is the world's largest hub for diamond cutting and polishing, handling nine out of every 10 diamonds processed globally. The United States accounts for nearly $10 billion or 30.4% of India's annual gems and jewellery exports of $32 billion.
Gems and jewellery are India's third-largest export to the United States, after engineering and electronic goods, and the industry employs millions in the South Asian country.
The sector has already been hit in recent months by weak demand from China and exports dropped 14.5% to $32.3 billion in the 2023-24 fiscal year (April-March).
"Going ahead, we expect trade activities to remain muted with US. However, we also need to wait and watch how the situation unfolds post the sixth round of India-US Bilateral Trade Agreement talks that will take place in August-end," Shah said.
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