The reciprocal tariff announcement by the US has sparked concern in the gem and jewellery industry of India, as the American market accounts for a major share of its business. There is a significant difference in the current tariff for the same commodities.

For the past couple of years, natural diamond exports to two major markets, the US and China, fell due to various global factors, including a slowdown, war and conflict between Russia-Ukraine and Israel-Gaza, and sanctions on Russian-mined diamonds. In such a scenario, the US assumes more importance for Indian gem and jewellery exports.

For cut and polished natural diamonds, the tariff in the US for India is 0%, while in India, it is 5%. Another major export from India to the US is studded gold jewellery, which is a key commodity affecting gem manufacturing as well. In India, the tariff for the US is 20%, while in the US, the tariff for India is 5.50%.
"If we continue to charge the higher tariff, jewellery manufacturing will shift to countries like Vietnam, where it is 0%," said a jewellery manufacturer and exporter to the US.

"The US notice, which threatens reciprocal tariffs, has raised concern within the Indian gems and jewellery sector, a key contributor to the nation's export revenue. The industry leaders outlined the potential economic fallout and presented specific recommendations to safeguard interests," said the Gem and Jewellery Export Promotion Council (GJEPC).
Industry experts said the import from the US is already low since we are among the top manufacturers in the world. "There will not be major harm for India to bring down the tariff to match what the US is collecting," said a gem and jewellery expert.

Representatives of the industry made a representation to union commerce minister Piyush Goyal recently and apprised him of the potential repercussions of the reciprocal tariffs.
Stay updated with breaking news, weather updates, bank holidays and upcoming public holidays in march.

Courtesy: TOI