India’s $32 billion India Jewellery Exports industry is facing a tough road ahead as the United States has imposed a 26% tariff on jewellery imports from India. With the US accounting for over 30% of India Jewellery Exports, this move is expected to have a major impact on businesses and jobs in the sector.
For years, Indian jewellery has been in high demand in the US market, known for its exquisite craftsmanship and competitive pricing. However, with this sudden tariff hike, the industry is bracing for significant losses, job cuts, and lower exports.
Why Are US Tariffs Impacting India Jewellery Exports?
The US government’s trade policies have been undergoing major changes, especially under President Donald Trump’s administration. The reason behind these tariffs is to reduce trade imbalances and encourage fair trade practices. While tariffs on Indian jewellery stand at 26%, other Asian nations like China (54%) and Vietnam (46%) have been hit even harder.
However, for Indian exporters, this tariff increase comes at a time when demand has already been declining due to global economic slowdowns and weak demand from China. In the 2023-24 fiscal year, India’s jewellery exports dropped by 14.5%, and with this tariff hike, the situation could worsen.
How Will This Impact India’s Jewellery Industry?
📉 Decline in Exports
With the US being a key export market, a decline in orders is expected. Higher tariffs mean higher prices for American consumers, making Indian jewellery less competitive. Many buyers may turn to local or alternative sources, further reducing India’s export volumes.
🏭 Impact on Small Businesses
Thousands of small and medium-sized jewellery businesses in India depend on exports for survival. These businesses may struggle with reduced margins, higher operational costs, and lower demand, forcing them to cut production or even shut down.
👷 Job Losses in the Sector
India’s jewellery industry employs millions, from artisans to traders. If exports decline further, many workers could lose their livelihoods, leading to economic distress in jewellery hubs like Surat, Mumbai, and Jaipur.
💰 Effect on Gold and Diamond Trade
India is a major importer of gold and diamonds, which are then processed and exported. With reduced demand from the US, raw material imports may also take a hit, affecting related industries like gold refining and diamond cutting.
What Steps Can the Industry Take?
The Gem and Jewellery Export Promotion Council (GJEPC) has urged the Indian government to consider reducing certain tariffs on US goods, such as:
✅ Lowering the 5% tariff on precious stones to 2.5%
✅ Reducing gold jewellery tariffs from 20% to 12%
These moves could help ease tensions between India and the US while making Indian jewellery more affordable for American buyers.
Is There Hope for a Trade Agreement?
Despite the challenges, there is cautious optimism in the industry. Ongoing trade negotiations between India and the US may result in tariff relaxations or alternative trade agreements.
Experts believe that if both governments work towards a mutually beneficial solution, the jewellery sector could recover faster. Until then, businesses will need to explore new markets, enhance domestic sales, and adopt innovative strategies to stay competitive.
Conclusion
The US tariff hike on Indian jewellery is a significant challenge for exporters, artisans, and business owners. As the industry navigates these uncertain times, government support and strategic planning will be key to minimizing losses.
With trade talks still ongoing, there is hope that a favorable agreement could be reached, ensuring that India’s jewellery industry continues to shine in the global market.
📌 What do you think? Will India’s jewellery exports recover from this setback? Share your thoughts in the comments!
