India's Gems & Jewellery Industry Hit by US Tariffs

Highlights

India’s $32B gems and jewellery sector faces a blow with a 26% U.S. tariff, affecting exports. Industry hopes for a trade deal to ease the impact.

India's $32 billion gems and jewellery industry is facing a significant challenge due to high tariffs imposed by the United States President Donald Trump. The US is India's biggest market for gems and jewellery. With a 26 per cent tariff imposition on the jewellery, India will struggle to sell in the US.

This new tariff is higher than expected, and it is already affecting the industry. Colin Shah, the head of Kama Jewelry, said that the tariff would severely hurt exports. India is the world leader in diamond cutting and polishing, processing 90% of the world’s diamonds. The U.S. buys almost 30% of India’s total gems and jewellery exports, which is around $10 billion.

The industry is already facing tough times due to weaker demand from China, and exports have dropped by 14.5% in the last year. Despite this, there is also hope that a new trade deal between India and the US could help reduce the impact of the tariff. India and the US are in talks to make a deal, and experts are hopeful that things might improve soon. India has set up a control room about these issues and constantly monitors it to reduce the US's reciprocal tariff impact.

For now, the industry is hoping to push through this difficult phase and come out stronger.