Market Analysis

India's $32 Billion Jewellery Industry Braces for Impact from US Tariffs

Amos Simanungkalit · 03 Apr33.7K Views

Image Credit: Reuters

India’s $32 billion gems and jewellery industry is bracing for a significant decline in exports following the imposition of high U.S. tariffs, which are expected to severely impact overseas sales to its largest market, industry officials said.

The United States has imposed a 26% reciprocal tariff on Indian goods, a move that has undermined India’s hopes for relief under President Donald Trump’s global trade policy.

"The tariff is much higher than expected," said Colin Shah, managing director of Kama Jewelry, one of India's leading diamond jewellery manufacturers. "It is quite severe and will certainly affect exports."

India is the world's largest center for diamond cutting and polishing, processing nine out of every ten diamonds globally. The United States represents nearly $10 billion, or 30.4%, of India’s annual gems and jewellery exports, making it the biggest destination for these goods.

Gems and jewellery rank as India’s third-largest export to the U.S., after engineering and electronic goods, and the sector supports millions of jobs in the country. However, the industry has already been struggling due to weak demand from China, and exports fell by 14.5% to $32.3 billion in the 2023-24 fiscal year (April-March).

A potential bilateral trade deal with the United States could mitigate the damage, Shah suggested.

"We're optimistic that India could strike a trade deal with the U.S. in the coming months. We just need to push through this difficult phase for a little while longer," said Shaunak Parikh, vice chairman of the Gem and Jewellery Export Promotion Council (GJEPC).