Story Highlight
– U.S. imposes 50% tariffs on India’s diamond exports.
– India seeks government intervention to mitigate job losses.
– Gujarat, Rajasthan, Maharashtra are most affected states.
– Industry demands extended export obligation and policy reliefs.
– MSMEs struggle; ₹500 crore bailout package requested.
Full Story
The Indian diamond and jewellery industry is facing significant challenges following the introduction of steep tariffs by the United States. As the leading exporter of cut and polished diamonds globally, India is reeling from a 50% import duty on these products, alongside tariffs ranging from 50% to 57% on various types of jewellery, which has disrupted longstanding trade relationships.
In the fiscal year 2024-25, India exported diamonds valued at approximately ₹46,000 crore and studded gold jewellery worth ₹23,000 crore, making the U.S. the largest market for these exports. The Gems and Jewellery Export Promotion Council has indicated that around 1.7 lakh workers in this sector could lose their jobs due to the impact of the tariffs, which predominantly affect medium and small enterprises (MSMEs), constituting 85% of the nation’s diamond exporters.
The industry is now calling for immediate governmental assistance to mitigate the impact of these tariffs. Stakeholders are requesting specific policy relief measures, which include extending the export obligation period for U.S. shipments from the current 90 days to 270 days and enabling jewellery manufacturing Special Economic Zones (SEZs) to conduct reverse job work in Domestic Tariff Areas (DTAs). This change would allow jewellery firms to better manage their inventory and manufacturing capabilities amidst declining orders.
Particularly affected states include Gujarat, Rajasthan, and Maharashtra. Gujarat is the primary site for cutting and polishing diamonds, while Rajasthan focuses on jewellery production involving gems and semi-precious stones. Maharashtra serves as a key hub for both studded and non-studded jewellery manufacturing and exports.
In addition to policy changes, the industry is advocating for monetary support such as interest subsidies that were previously available during the COVID-19 pandemic, temporary export subsidies, and enhanced worker benefits. There are also calls for banking incentives and liquidity support to ensure businesses can maintain operations during this turbulent period.
The urgency of these requests stems from a need to safeguard MSMEs, which have dedicated years to growing their businesses and now face existential threats from these tariff changes. Industry leaders assert that while larger exporters may endure the strain, many smaller firms will likely see their financial viability severely compromised without targeted assistance. Kirit Bhansali, chairperson of the Gem and Jewellery Export Promotion Council, emphasised the critical nature of this situation, noting that approximately 30% of India’s gem and jewellery exports are directed towards the U.S. market.
With industry estimates suggesting that a total relief package of around ₹500 crore may be necessary, the plea for government intervention has become increasingly pressing as the sector seeks to navigate through these unprecedented challenges.