The reciprocal tariff of 27% will jack up customs duties faced by Indian exporters of studded and gold jewellery in the US to 32-34%, including 5.5-7% extant tariffs. Diamond products which currently do not have any tariffs, will cost US importers a 27% import duty.
Sabyasachi Ray, Executive Director of the Gems & Jewellery Export Promotion Council (GJEPC) said, “We are urging everyone to wait and watch as negotiations on bilateral trade agreement are under way. Our concerns have been sent to the commerce ministry and other bodies and we hope for the best.”
He explained that the proposed tariffs have been announced by the US to mitigate trade imbalance, and if Trump is satisfied with the negotiations, he may even reduce the tariff amount.
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“Currently, many exporters will try to push their goods out to the US before the tariffs are implemented. If these numbers do not reduce, there is a risk of all trade coming to a standstill for a month or two, forcing companies to find newer export destinations,” he acknowledged.
As of FY24, 30% of the US’s total gems and jewellery imports came from India. According to the GJEPC, India’s current export volume to the US is valued at $10 billion, with $4 billion coming from the jewellery segment and USD 6 billion from diamonds.
Alkesh Shah, Vice Chairman of Goldstar Jewellery, opines that if exports are heavily impacted, the industry may have to rely on the domestic market to stay afloat. He said, “The chances of remaining competitive are slim if other countries have lesser tariffs. To cut our losses, industry bodies may collaborate with the government to boost domestic sales. At the very least, it will save many people from unemployment.”
President of the Jewellers Association Jaipur, Alok Sonkia said: “Currently, there is no clarity on sector-specific tariffs and whether they will be reduced,” he stated. “If competitor countries such as Thailand, which currently faces a 36% tariff, negotiate and lower the amount, the jewellery segment will be in big trouble.” Sonkia said that niche segments such as plain gold jewellery and polki jewellery, which find sizeable demand in India, could be spared.
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