The India-UK free trade agreement (FTA) has sent waves of optimism and relief across the gems and jewellery sector, which continues grappling with declining sales and the uncertainty of the US’s reciprocal tariffs.
Previously, the UK’s tariffs on Indian gems and jewellery imports would reach up to 4%. Now, with zero duty on gems and jewellery, exports to the UK could amount to $3 billion in the future, according to Gem and Jewellery Export Promotion Council (GJEPC) Chairman, Kirit Bhansali. “Pertinently, our exports to the UK amount to approximately $1 billion. We see the scope of exports growing to $3 billion over the next 3-5 years,” he said to FE.
Bhansali noted that the UK is home to many luxury jewellery brands and a vast South Asian diaspora. “Recently, Kalyan Jewellers and Malabar Gold and Diamonds inaugurated 3 stores each in the UK, showcasing a growing demand for retail jewellery. Other retailers are also in the process of setting up shop in the UK. Given the UK’s high spending potential and luxury brands, the agreement will also boost manufacturing for Indian artisans and small-scale businesses,” he stated.
Currently, India imports gems and jewellery from the UK worth $2.7 billion. Alkesh Shah, Vice Chairman of Goldstar Jewellery, predicts a major boost for Indian exporters, especially those manufacturing studded and plain gold jewellery. He said, “The export potential for jewellers and diamantaires will significantly increase, but the studded and gold jewellery segments stand to benefit the most from this agreement. We can comfortably predict a 10-15% year-on-year growth for our UK exports, maybe even more.”
Both Shah and Bhansali stated that while the agreement will open newer avenues for Indian exporters, it is not an alternative to the US market, which has different product demands. Rather, they acknowledged that the UK is now a solid add-on for Indian exporters, rather than an alternative to the US.
Vipul Shah, CEO & Managing Director of Asian Star Jewellery, hailed the agreement as a much-needed fillip to the Santacruz Electronics Export Processing Zone (SEEPZ), which houses over 180 gems and jewellery processing units. “The employees at SEEPZ faced uncertainty due to the tariffs and an overall decline in demand from countries such as China. With the increased exports of studded jewellery and other precious metals, their jobs will be safeguarded,” he opined.
The UK’s mature luxury and fashion markets provide a lucrative opportunity for various gems and jewellery segments, including gold jewellery, studded jewellery, and lab-grown diamonds, according to Kama Jewellery’s Managing Director, Colin Shah. He addressed the competitive edge India has over competitor countries with this agreement, saying, “The FTA will also provide Indian exporters a preferential access over competitors like China and Thailand, who either lack a similar agreement or do not enjoy equivalent tariff concessions. This will also give Indian exporters the benefit of price competitiveness, especially when Chinese and Thai products continue to face higher duties. We expect India’s overall gems and jewellery exports to the UK to increase by 10-15% this fiscal.”