Story Highlight
– GJEPC requests domestic production in SEEPZ for jobs.
– Seeks six-month interest moratorium on export loans.
– High US tariffs severely impact jewellery exports.
– Job losses threatened in gems and jewellery sector.
– Demand for lab-grown diamonds rising amidst tariffs.
Full Story
The gemstone and jewellery sector has urged Finance Minister Nirmala Sitharaman to permit export-focused jewellery manufacturers in Mumbai’s Santa Cruz Electronics Export Processing Zone (SEEPZ) and other jewellery Special Economic Zones (SEZs) to also cater to the domestic market. The industry is additionally seeking a six-month interest moratorium on loans tied to jewellery exports destined for the United States, aiming to mitigate the detrimental effects of recently imposed tariffs.
Representatives from the Gem & Jewellery Export Promotion Council (GJEPC), including Chairman Kirit Bhansali and Executive Director Sabyasachi Ray, voiced their concerns during a meeting with the finance minister. They contended that allowing domestic production within the SEZs would help safeguard jobs within the sector, which has recently faced a dramatic drop in export orders to the US due to a 50% tariff that came into effect on August 27.
A ministry official noted that the industry’s request also includes a three-month duty exemption to facilitate domestic sales during the upcoming festive season. However, this proposal encounters several technical obstacles. Currently, SEZs are required to pay full customs duty on finished products sold in the domestic tariff area. The industry has suggested that duty calculations instead be based on the value of imported raw materials.
India exported approximately $10 billion worth of gems and jewellery to the US in the fiscal year 2025. Following the discussions, Bhansali remarked, “The India-US trade talks have resumed, which is a welcome step. However, the process may take time, and until a resolution is achieved, it is essential to introduce relief measures to help the sector survive and sustain.”
He highlighted the increasing domestic demand for jewellery, asserting that permitting SEZ units to produce for local markets could help prevent further job losses. Additionally, the GJEPC has requested an extension of the export obligation period for shipments to the US from 90 days to six months for exports made from April 2, 2025.
To ease the financial impact of the newly imposed tariff on jewellery exports, the industry is advocating for a six-month interest moratorium on packing credit loans specifically for US-bound exports, commencing from August 2025 and concluding in January 2026. They are also seeking a deferral of interest payments on working capital loans covering the same period.
GJEPC representatives noted that there is a pressing need to avert job losses at both SEEPZ and Surat, which is responsible for cutting and polishing the vast majority of the world’s diamonds. Meanwhile, many companies involved in natural diamond production are establishing lab-grown diamond (LGD) manufacturing operations due to rising demand. Bhansali explained, “The demand for LGDs is on the rise in the US and domestic market. Prices of LGDs are much lower than natural diamonds. Even with a 50% tariff, LGDs are not putting pressure on consumers.”
According to CARE Ratings, India currently produces over 3 million carats of lab-grown diamonds each year, which accounts for around 15% of global production. As an essential hub for jewellery exports to the US, SEEPZ in Mumbai is already feeling the adverse impacts of the tariffs.
Adil Kotwal, President of the SEEPZ Gems & Jewellery Manufacturers’ Association, disclosed that there are approximately 200 jewellery manufacturing units within SEEPZ, employing around 100,000 individuals. He noted that these units typically export gems and jewellery worth nearly 25,000 crore rupees to the US. Kotwal commented, “Due to the high tariff, US buyers are placing fewer orders, and the capacity utilisation of the units has fallen by 40%. Many contract workers are struggling to find daily employment.”