Gold jewellery exports to the United States may halve to $1.50 billion next fiscal year as the US contemplates higher tariff of 5 per cent to 20 per cent on imports of gem and jewellery from India.
Seeking the government’s intervention, the Gem and Jewellery Export Promotion Council (GJEPC) study has estimated that the punitive tariff will lead to a fall in gold jewellery exports by 20 tonnes and direct job loss for 1-1.5 lakh people in the gold jewellery segment alone.
The apex nodal trade body expects domestic gold jewellery manufacturers to shift base to Oman, Singapore, UAE or Hong Kong to take the advantage of relatively lower tariffs in these countries.
While UAE can further expand its gold jewellery trading with the US, countries such as Jordan, Switzerland and France are rapidly increasing their market share in the US and pose a major threat for India. Duty-free competitors are gaining traction, while India faces potential market erosion due to tariff disadvantages.
Share in US import
The gem and jewellery industry can face several challenges due the Reciprocal and Fair Plan (RFP) announced by US President Donald Trump to reduce its trade deficit with different countries.
The gem and jewellery exports to the US at $9.45 billion account for 29 per cent of India’s total exports at $32.85 billion in FY24. Similarly, India is one of the key sourcing countries of the US for gem and jewellery products. India constitutes a 13 per cent share in the US total gem and jewellery imports of $89.12 billion from the World, according to GJEPC study.
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Sabyasachi Ray, GJEPC Executive Director, said the government should pursue a preferential trade agreement with the US and engage in discussions to highlight the industry’s concerns and seek tariff relaxations.
GSP benefits
GJEPC remains committed to working closely with the government to protect the interests of exporters and sustain our trade relationship with the US, he said.
The US has removed a duty concession of 5.5 per cent for India on selected products. Data indicate that prior to the GSP withdrawal, India’s exports of gold jewellery to the US was $2.21 billion in 2006. However, exports plummeted by about 50 per cent to $1.01 billion in a year after the GSP benefit was withdrawn in 2007. Though exports recover in 2015, it did not touch the previous high of $2 billion till 2022, nearly 15 years after the GSP benefit was withdrawn from India.
