India’s gem and jewellery businesses face a bleak year-end holiday season following Washington’s decision to slap a 50 per cent tariff on the country’s exports, as they warn the move could affect more than two-thirds of their shipments to the United States.
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On Wednesday, the tariff on India’s exports to the US took effect in response to New Delhi’s purchases of Russian oil and weapons.
“With the imposition of a 50 per cent tariff, we expect exports to the US to decline by more than 70 per cent. This sharp fall will cause a major dent in India’s overall gem and jewellery exports this year, with far-reaching consequences for the industry and its workforce,” Shaunak Parikh, vice-chairman of India’s Gem and Jewellery Export Promotion Council, told This Week in Asia.
The US is India’s largest market for gem and jewellery exports. In the 2024-25 financial year, shipments to the US reached US$9.23 billion, or almost a third of the total for such exports from India.
India is the world’s largest exporter of diamonds due to its dominance in diamond cutting and polishing, covering 90 per cent of the world’s rough diamonds. While not a major diamond producer, India imports raw diamonds and re-exports them as finished, polished stones.
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The tariff could not have come at a worse time for the industry. Orders have started slowing over the last few years due to the US-China trade war, conflicts such as the war in Ukraine, and a rise in demand for cheaper laboratory-grown diamonds.