Indian jewellery exporters dispatched $500 million worth of goods to the US between March 26 and April 2 in anticipation of the imposition of reciprocal tariff, tariffs, said an official with the Gems and Jewellery Exports’ Promotion Council (GJEPC). These exports were equivalent to a month’s production, and is expected to provide the industry with a three-month relief.
“All the exports were done between March 26 and before April 2. To achieve this, we had requested the Indian customs office to work overtime and remain open to allow clearance for exporting to the US,” said an official.
Sources stated that the industry was expecting a minimum tariff of 10% — something that would have hurt the exports, as US customers may not be willing to pay the higher price. This would have hurt the industry very badly at a time when the diamond cutting and polishing industry is going through a very rough patch. Hence, the official said that exporters were advised to push the shipping-ready stock to the US.
While the US has paused the 26% reciprocal tariff for 90 days, the industry is hopeful that India may be able to stitch together a bilateral treaty before that.
The GJEPC, an apex body of gem and jewellery exports, has done a study to suggest that shows that Indian polished diamonds and lab-grown diamonds imports in the US attract zero duty, but when they are exported to India from the US, the applicable import tariff is 5%. So, there is a case for a lower duty. On plain gold jewellery, the US charges 7% duty while India has imposed a 20%. GJEPC has requested the government to cut the 20% jewellery import duty.
The council has asked the government to give the USA the duty concession in the import of gold/silver bullion (like what has been given under CEPA to the UAE) under the proposed treaty to balance the trade deficit. Also, give US import duty of 6-10% under the treaty for the import of jewellery into India to balance the average tariff. Against this, the US can cut the 10% blanket tariff to provide relief to Indian gem and jewellery exports.
Although the diamond export industry’s woes are not confined to the US duty, many of them are under pressure to pay bank debt. Due to pricing pressure and rising costs, several cutting-polishing units have cut the salaries of their employees. Although this issue is confined to real diamonds, the exporters’ body has requested respective banks to allow more time to repay loans, instalments till the tariff issue is sorted out and exports revive.