While Trump’s current 90-day pause on tariffs has given the gems and jewellery exporters a respite, traders still expect a significant slowdown in fresh orders and shipments in the short term.
According to Kirit Bhansali, Chairman of the Gold and Jewellery Export Promotion Council (GJEPC), exporters, in an attempt to evade the 10% universal baseline tariff that came into effect on April 4, had exported large quantities of products to the US in the previous few days.
“Since exporters already shipped a lot of goods, we expect a slowdown in US business for the next month and a half,” he told FE. “The 10% duty (which stays aven after the pause announced for 26% duty) may impact segments such as loose diamonds, which already operate on slim 3-5% margins. The government is in talks for a Free-Trade Agreement (FTA) with the USA, if that comes through within a month, it could boost our business.”
According to data, India’s gems and jewellery exports to the US between April 1 and 4 amounted to $343.71 million, nearly six times the shipments in tye year ago period.. Cut and polished diamonds (CPD) exports amounted to $319.9 million in the period, up 481% on year.s.
The industry has mixed reactions to the 90-day tariff pause. Alok Sonkiya, President of the Jewellers Association Jaipur, said “It is still a very volatile period and decisions can change anytime. As exporters promptly shipped their goods before April 4, there will be a slowdown in new orders. The biggest advantage is for companies whose exports were halted, they can now be processed under the 10% tariff.”
He noted that the US’s 125% tax on China could greatly benefit India. “Indian companies have already begun receiving enquiries about the possibility of shifting manufacturing bases to the country from their Chinese counterparts,” he noted.
Sabyasachi Ray, Executive Director of the GJEPC also acknowledged India’s advantage amidst the Sino-US tariff war. “There is a high possibility that Chinese orders may begin flowing through India in the near future, especially for diamond jewellery,” he said, adding, “On a consumer level, prices of gems and jewellery will increase by 5-10%. There are already discussions between foreign buyers and our exporters on the possibility of sharing the tariff price. That is the temporary solution as we await more clarity,” he concluded.