Gold jewellery exports to the United States are expected to see a significant decline next fiscal year, as the US considers imposing higher tariffs ranging from 5 per cent to 20 per cent on imports of gem and jewellery from India. According to a study conducted by the Gem and Jewellery Export Promotion Council (GJEPC), this punitive tariff could potentially lead to a 50 per cent reduction in gold jewellery exports to the US, resulting in a projected export value of $1.5 billion and direct job losses for 1-1.5 lakh individuals in the gold jewellery segment.
The GJEPC anticipates that in response to the higher tariffs, domestic gold jewellery manufacturers may relocate to countries such as Oman, Singapore, UAE, or Hong Kong where the tariff rates are comparatively lower. This shift could potentially open up opportunities for countries like the UAE to expand their gold jewellery trading with the US, while posing a threat to India’s market share in the US market.
The imposition of higher tariffs is part of the US government’s Reciprocal and Fair Plan (RFP) aimed at addressing trade deficits with various countries. India’s gem and jewellery exports to the US currently account for 29 per cent of the country’s total exports, with India being a key sourcing country for gem and jewellery products in the US market.
In light of these developments, the GJEPC is urging the Indian government to engage in discussions with the US to address the concerns of the gem and jewellery industry and seek tariff relaxations through a preferential trade agreement. The council is committed to collaborating closely with the government to protect the interests of exporters and maintain a healthy trade relationship with the US.
Furthermore, the study highlights the impact of the withdrawal of duty concessions under the Generalized System of Preferences (GSP) by the US. The removal of GSP benefits for India on selected products led to a significant decline in gold jewellery exports to the US in the past. The GJEPC stresses the need for strategic interventions to mitigate the potential market erosion and sustain India’s position in the global gem and jewellery industry.
