India’s gem and jewellery industry, a cornerstone of the country’s export economy, is facing a major setback following the United States’ decision to impose a 25 percent tariff on Indian imports starting August 1. The move, announced by US President Donald Trump, has triggered alarm across the sector, with industry leaders warning that over one lakh jobs could be at risk, particularly in the handmade jewellery segment.
Key implications of the tariff hike
- The new 25 percent tariff replaces a previous 10 percent duty, which had already led to an estimated 50,000 job losses in the sector
- Industry experts anticipate that the current hike could double the impact, jeopardizing more than one lakh livelihoods
- Handmade jewellery exports are expected to be hit hardest, as US buyers may turn away from costlier Indian products
- The United States is India’s largest jewellery export market, accounting for USD 9.9 billion in shipments last fiscal year
This tariff escalation comes at a time when the industry is already grappling with geopolitical tensions and subdued global demand.
Industry response and concerns
- Rajesh Rokde, Chairman of the All India Gem and Jewellery Domestic Council, expressed deep concern over the timing and scale of the tariff hike
- Colin Shah, Managing Director of Kama Jewellery, highlighted that the sector has been under pressure due to prolonged disruptions from the Russia-Ukraine conflict and instability in the Middle East
- Stakeholders fear muted trade activity with the US in the coming quarters, potentially affecting small-scale artisans and exporters disproportionately
- The industry is now looking to upcoming India-US Bilateral Trade Agreement talks in late August for potential relief or renegotiation
The sentiment across the sector is one of cautious hope, tempered by the reality of immediate disruptions.
Exploring alternative markets
- Indian exporters are actively exploring new destinations, including the European Union, the Middle East, and Australia, to offset losses from the US market
- Recent Free Trade Agreements with the UK and UAE are expected to provide some cushion, allowing exporters to pivot quickly
- Industry leaders believe that while the short-term impact may be severe, India’s diversified trade relationships could help mitigate long-term damage
- The government is being urged to expedite trade facilitation measures and provide support to affected workers
This strategic shift underscores the importance of market agility and policy support in navigating global trade headwinds.
Economic and social ramifications
- The jewellery industry employs millions across India, with a significant portion engaged in artisanal and small-scale production
- Job losses could disproportionately affect women and rural workers, who form a large part of the handmade jewellery workforce
- Rising unemployment in this sector may have ripple effects on local economies, especially in states like Maharashtra, Gujarat, and Tamil Nadu
- Exporters warn that the tariff could also lead to increased prices for American consumers, potentially reducing demand further
The broader economic impact could extend beyond the jewellery sector, affecting ancillary industries and regional employment patterns.
Looking ahead
- Industry associations are calling for urgent government intervention, including export incentives and diplomatic engagement with the US
- The sixth round of India-US trade talks is being viewed as a critical juncture for resolving tariff-related disputes
- Meanwhile, exporters are accelerating digital outreach and product diversification to maintain competitiveness in non-US markets
- The sector’s resilience will depend on its ability to adapt quickly and leverage India’s global trade network
Conclusion
The imposition of a 25 percent tariff by the United States has cast a shadow over India’s gem and jewellery industry, threatening over one lakh jobs and disrupting a key export channel. While the sector is mobilizing to explore alternative markets and policy support, the immediate impact is likely to be significant. As trade negotiations loom, the industry’s future hinges on diplomatic agility, strategic diversification, and sustained government backing.
Sources: The Hindu BusinessLine, Economic Times, NewsBytes, Retail Economic Times, ANI, Ministry of Commerce India, All India Gem and Jewellery Domestic Council, Kama Jewellery corporate statements
