Trump's Tariff Shock: Indian Jewellery Industry Faces Crisis As Jobs, Exports Hang In Balance

India's gems and jewellery industry is bracing for a major blow after US President Donald Trump announced a 26% tariff on imports from India. The sharp increase raises the import duty from approximately 6% to around 34%, putting one of India's top export sectors-and the livelihoods it supports-at significant risk.

The United States is the largest market for Indian gems and jewellery. In the 2023-24 financial year, India exported about $33 billion worth of these products, with nearly $10 billion going to the US. Industry stakeholders fear that the steep tariff hike will reduce demand drastically, making Indian jewellery less competitive in the American market and threatening thousands of jobs.

Industry Grapples with Double Pressure from US and China

The sector, which employs millions of workers in roles such as diamond cutting, polishing, and crafting, is already dealing with weakened demand from China. In 2023-24, exports to China dropped by 14.5%, and the US tariff hike could compound the sector's challenges.

Colin Shah, founder and MD of Kama Jewelry, said the industry had anticipated a possible hike in duties but was not prepared for an increase of this scale. "We were preparing for a 10-15% hike. But 27% is too high a rate," he said. "This will lead to a steep hike in cost for these Indian products for US buyers, which in turn would affect demand."

The Gems & Jewellery Export Promotion Council (GJEPC) also voiced concerns, stating that the reciprocal tariff would place a heavy burden on Indian exporters while also affecting US consumers. The council warned that the sudden price jump could push Indian goods out of the American market, opening doors for rival exporters.

Industry leaders caution that if no favorable trade resolution is reached, exports to the US could drop by 30% to 50%, potentially causing widespread job losses, especially in smaller units that depend heavily on US demand.