Story Highlight
– GJEPC requests permission for SEZs to produce domestic jewellery.
– Exporters seek six-month interest moratorium on loans.
– High US tariffs have significantly impacted Indian exporters.
– Domestic jewellery demand rising; job loss prevention urged.
– SEEPZ units facing 40% drop in capacity utilisation.
Full Story
The gem and jewellery sector has urged Finance Minister Nirmala Sitharaman to enable export-oriented jewellery units located in Mumbai’s SantaCruz Electronics Export Processing Zone (SEEPZ) and other specialised zones to cater to the domestic market. In addition, industry representatives have requested a six-month moratorium on interest payments for loans related to jewellery exports to the United States, amidst challenges posed by recent steep tariffs.
At a meeting on Wednesday, Gem & Jewellery Export Promotion Council (GJEPC) officials, including Chairman Kirit Bhansali and Executive Director Sabyasachi Ray, conveyed that allowing the manufacturing of jewellery for local consumption could help preserve jobs at a time when exports to the US have significantly declined due to the new 50% tariff imposed from August 27.
A ministry official indicated that the industry’s appeal included a three-month exemption period from duties for domestic sales, particularly to leverage the upcoming festive season. However, the proposal faces technical challenges, as SEZs currently incur full customs duty when selling finished products outside designated zones. The GJEPC has suggested that duty calculations be based on the imported raw materials instead.
Bhansali noted that India’s gems and jewellery exports to the US reached approximately $10 billion in FY25. He expressed optimism about the resumption of trade talks between India and the US but stated that immediate relief measures are crucial for the industry’s survival. “We have urged the finance minister to extend the export obligation period for shipments to the US from the current 90 days to six months,” he added.
The GJEPC has also advocated for a moratorium on interest for packing credit loans from August 2025 to January 2026, specifically for exporting jewellery to the US, to alleviate financial pressure caused by the tariffs. Additionally, they have requested that interest on working capital loans be deferred from August 1, 2025, to January 1, 2026.
With a significant number of jobs at risk, particularly in SEEPZ and Surat—where around 90% of the world’s diamonds are cut and polished—the GJEPC is keen to protect employment. As demand for lab-grown diamonds increases in both US and domestic markets due to their lower costs, Bhansali stressed the need for support for natural diamond producers. “Even with the 50% tariff, lab-grown diamonds remain affordable. We anticipate that conditions will improve for natural diamonds as trade agreements progress,” he explained.
Currently, India produces more than 3 million carats of lab-grown diamonds annually, making up about 15% of global production, according to CARE Ratings. SEEPZ, a vital hub for gem and jewellery exports to the US, is already experiencing a significant downturn. Adil Kotwal, President of the SEEPZ Gems & Jewellery Manufacturers’ Association, reported that the 200 manufacturing units in the area employ around 100,000 individuals, exporting nearly Rs 25,000 crore worth of goods to the United States. He highlighted the drastic reduction in orders due to the tariffs, which has led to a 40% drop in capacity utilisation, affecting the employment of contract workers.