India’s gems and jewellery industry is facing a major challenge after US President Donald Trump announced a steep hike in import tariffs. The duty on Indian jewellery has been doubled from 25% to 50%, a move that industry leaders are calling “doomsday” for the sector.
The US is India’s biggest market for polished diamonds and studded jewellery, buying around $10 billion worth each year. With the new tariff, Indian exporters fear they will lose a large share of this market, leading to falling sales, factory closures, and job losses.
To deal with the crisis, companies are now exploring ways to shift part of their production overseas. The plan is to set up manufacturing units in countries with lower tariffs, such as the United Arab Emirates (UAE) and Mexico, and then export from there to the US.
Kirit Bhansali, chairman of the Gem & Jewellery Export Promotion Council (GJEPC), said Dubai is the most practical choice since it is close to India and faces only a 10% US tariff. Mexico, with a 25% tariff, is also being considered for routing certain types of jewellery. He stressed that all rerouting would be done legally and in compliance with trade rules.
Big names like Titan Company are also looking at shifting some manufacturing to the Middle East. Bhansali explained that when the tariff was at 25%, exporters could still adjust their margins to stay competitive. But at 50%, it is “impossible to survive” without making major changes.
The immediate impact has already been felt. According to Adil Kotwal, president of the SEEPZ Gems and Jewellery Manufacturers Association in Mumbai, there are currently no new orders from the US. SEEPZ hosts 200 export units and employs nearly 100,000 workers, making it a key hub for the industry.
While goods already shipped before August 7 are safe from the new tariff, future exports face serious obstacles. A US industry delegation is expected to visit India on August 19 to discuss the issue with Indian trade leaders and government officials.
For now, the industry is racing to find alternative routes to keep exports flowing. Without quick action, the tariff hike could cause widespread disruption and put thousands of jobs at risk.
