Trump’s tariff hike threatens India’s $11 bn gems & jewellery exports

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The reciprocal tariffs announced by the United States  are set to significantly impact India's $32 billion gems and jewellery export market, since the US accounts for $11.58 billion, or 34%, of these exports.

The higher levies could erode India’s competitive edge, disrupt trade flows, and pose challenges for lakhs of workers, said experts.

India’s exports to the US include a diverse range of products, like cut and polished diamonds ($5.6 billion), studded gold jewellery ($2.55 billion), plain gold jewellery ($267 million), lab-grown diamonds ($831 million), silver jewellery ($320 million), and more.

Gold jewellery and diamonds—key drivers of India’s exports—stand to suffer the most, according to Adil Kotwal, President, SEEPZ Gems & Jewellery Manufacturers’ Association (SGJMA).

"Tariffs are more than economic measures; they redefine the dynamics of trade partnerships. The gems 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," said Rajesh Rokde, Chairman, All India Gem and Jewellery Domestic Council (GJC).

In FY 2023-2024, India exported gems and jewellery worth $32.85 billion globally, with the US accounting for 30.28 percent ($9.95 billion). In calendar year 2024, India supplied 12.99 percent ($11.58 billion) of America’s total gem and jewellery imports worth $89.12 billion, as per US International Trade Commission (USITC) data.

"It's a big setback for India as the US has announced retaliatory tariffs. While in the broader sense, it will be 26 percent, the gems and jewellery sector will be the most affected as import tariffs may be up to 20 percent from nil now on loose diamonds and 5.5-7 percent on gold jewellery. The US is one of India's largest jewellery export markets, accounting for almost 30 percent. Indian jewellery exports to the US are over $11 billion per year," said Colin Shah, managing director of Kama Jewellery.

Industry experts flag that increased tariffs could make Indian exports less competitive, compared to those by Thailand, Vietnam, and Korea, affecting market share and profit margins. Supply-chain disruptions could potentially  push manufacturers to explore alternative trade routes or shift production offshore. The industry, heavily reliant on skilled artisans and MSMEs (micro, small and medium enterprises), could see significant strain, if orders from US buyers decline.

Gems and jewellery rank as India’s third-largest export to the US, followed by engineering and electronic goods. The industry is a crucial employer, providing livelihoods to millions across the country.

"As far as domestic consumption of gold is concerned, neither is India an importer of gold nor jewellery from the US. So, as far as PNG Jewellers’ business is concerned, we won’t face any impact," said Saurabh Gadgil, Chairman and Managing Director, PNG Jewellers.