India’s gem and jewellery sector will be severely affected by the US tariff of 50 per cent from August 27, according to the Gem and Jewellery Export Promotion Council (GJEPC).

On August 6, US President Donald Trump announced that an additional 25 per cent tariff will be imposed on Indian goods from August 27, citing the country’s purchase of Russian oil. An earlier announced reciprocal tariff of 25 per cent came into effect on August 7. 

GJEPC chairman Kirit Bhansali said, “The US is our single largest market, accounting for over US$10 billion in exports – nearly 30 per cent of our industry’s total global trade. A blanket tariff of this magnitude is severely devastating for the sector.”

Bhansali noted that 85 per cent of exports from SEEPZ Special Economic Zone heads to the US. Half of India’s exports of cut and polished diamonds are US-bound. 

Moreover, competing manufacturing hubs such as Turkey, Vietnam and Thailand enjoy significantly lower tariffs of 15 per cent, 20 per cent and 19 per cent, respectively, making Indian products relatively less competitive in the US market.  

“We are also concerned about the possibility of trade rerouting through low-tariff destinations such as Mexico, Canada, Turkey, the UAE or Oman – undermining the spirit of legitimate trade and impacting transparency,” Bhansali continued.

He disclosed that GJEPC is actively exploring new markets and training its sights on domestic prospects, particularly for the diamond sector. Transactions at IIJS Premiere in Mumbai from July 30 to August 3 were estimated at US$8 million to US$11.4 million, testifying to strong domestic demand.

Bhansali also called for the Indian government to provide policy reforms and extensive support to help the industry during these challenging times.