India’s $32 billion gems and jewelry industry is set to experience a significant drop in exports due to high U.S. tariffs, which threaten sales to its biggest market. Industry leaders say the new 26% reciprocal tariff imposed by the United States will severely impact overseas shipments.
Colin Shah, managing director of Kama Jewelry, one of India’s top diamond jewelry manufacturers, expressed concern about the tariff. “The tariff is higher than expected. It is quite severe and will affect exports,” he told Reuters.
India is the world’s leading hub for diamond cutting and polishing, handling about 90% of the global supply of processed diamonds. The United States is a key market, accounting for nearly $10 billion, or 30.4%, of India’s annual jewelry exports. The sector ranks as India’s third-largest export to the U.S., behind engineering and electronics, and provides millions of jobs across the country.
However, the industry has already faced setbacks, including weaker demand from China, which led to a 14.5% drop in exports in the 2023-24 fiscal year, falling to $32.3 billion.
Despite the challenges, there is hope that a long-term trade deal between India and the United States could ease the pressure. India and the U.S. are currently negotiating a potential trade agreement.
“We are optimistic that India could reach a trade deal with the U.S. in the coming months. For now, we just need to endure this difficult phase,” said Shaunak Parikh, vice chairman of the Gem and Jewelry Export Promotion Council (GJEPC).
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