The US government’s recent decision to impose a 27% reciprocal tariff on Indian gem and jewellery exports represents a critical turning point for one of India’s key export industries. With the global economy in flux, the GJEPC has highlighted the potential consequences and outlined urgent steps needed to address the trade disruption between India and the United States.
Valued at over $10 billion annually, Indian gem and jewellery exports to the US now confront substantial challenges, both immediate and ongoing. The GJEPC has called on the US to honour the enduring trade relationship with India, which has long been rooted in shared economic gains and mutual respect.
Short-Term Pressures, Long-Term Shifts
The imposition of a 27% tariff could severely disrupt pricing structures and cash flows throughout the Indian gem and jewellery supply chain. While there is a ray of hope that a Bilateral Trade Agreement (BTA) may eventually ease tensions, immediate relief is unlikely, especially as the US seeks substantial concessions in other sectors such as agriculture and dairy.
In the midst of these policy shifts, the GJEPC convened an internal trade body meeting on 4th April to apprise industry stakeholders of the gravity of the situation and present the on-ground realities.
During the meeting, the Council, along with major trade players, stressed that the new duty landscape demanded immediate recalibration. The Council and other industry leaders outlined a targeted action plan to help the sector adapt swiftly. A key recommendation was for exporters to prioritise shipments before 9th April, giving manufacturers a crucial window to clear consignments ahead of anticipated procedural and tariff-related delays.
Responding to this call, gems and jewellery exporters moved quickly to accelerate outbound shipments amid growing pressure, ensuring goods reached US shores before the increased tariff impact fully took hold. This proactive surge in exports reflects the industry’s agility in the face of policy disruption.
Notably, media reports informed that Mumbai Customs cleared a US-bound shipment of cut and polished diamonds valued at $319.9 million, underscoring both the scale of ongoing trade and the high stakes involved. This clearance reinforces the urgent need for coordinated responses between exporters, industry bodies, and government authorities to navigate the challenges of the new tariff regime effectively.
Both US retailers and Indian exporters must now acknowledge that these duties are here to stay—at least through the 2025 holiday season—and align their strategies and pricing structures accordingly.
INDUSTRY REACTIONS
Kirit Bhansali, Chairman, GJEPC
“This tariff hike affects not just exporters but every link in the manufacturing chain—across SEEPZ, Surat, Noida, Jaipur, and beyond. Thousands of workers are at risk of losing their jobs. We urge both the State and Central Governments to act swiftly. The need of the hour is targeted relief—whether through reverse job work permissions, financial support measures, or policy interventions that help us retain our skilled labour. We can manage trade disruption if we keep our workforce intact. Once we lose workers, bringing them back won’t be easy.”
Shaunak Parikh, Vice Chairman, GJEPC
“We’ve submitted a clear proposal to the Government: reduce duties on jewellery exports to the US to match those on gold. If the US agrees to 5–6%, production can resume at a sustainable pace. Otherwise, the industry is left paralysed. Our concerns were communicated even before the Hon’ble Commerce Minister Shri Piyush Goyal visited Washington. The Government is fully aware that if this duty regime continues, businesses will struggle, and jobs will be lost. We hope they will prioritise this issue and push for a fair resolution urgently.”
Ajesh Mehta, Convener – Diamond Panel, GJEPC
“Let’s face it—there’s no quick fix here. Trump has held this view on tariffs since before he was elected, and bilateral trade agreement (BTA) deals don’t happen overnight. So, we must treat this as a long-term disruption and shape our industry strategy accordingly. First, we need to work with the Commerce Ministry to push forward negotiations as fast as possible. Second, we must take care of our people—especially the workers in jewellery and diamond manufacturing. And third, we need to give clear guidance to the trade: do not overproduce. Match output to real demand, and avoid the kind of price corrections we’ve seen in the past when supply outpaced market conditions.”
Anoop Mehta, Co-convener, Diamond Panel, GJEPC
“Let’s be clear—this is not a short-term disruption. The US tariff hike is here to stay, and we need to stop waiting for relief that may take months, or never come. We cannot plan on hopes or assumptions. The hard reality is that the industry is staring at a prolonged period of uncertainty, and our immediate challenge is to protect jobs. This crisis affects not just exporters, but the entire workforce engaged in export jewellery, domestic jewellery, and diamond cutting. No segment is insulated.
“Even measures like reverse job work can only help at the margins. Moving work from one zone to another doesn’t solve the problem—it just shifts the pain. The truth is, India’s domestic demand cannot absorb the production that’s stalled by the US market. If we don’t act now, we will see tens of thousands of skilled workers displaced across the country—in Surat, Jaipur, Mumbai, and beyond. And once those jobs are lost, the damage will be hard to reverse. This is the time for government to step in decisively—with policy relief, financial support, and job protection measures. Industry alone cannot absorb this shock. We also urge our exporters to stop giving mixed signals to buyers—don’t say duty will come down in a few months. That only delays the hard pricing decisions retailers need to make. Be honest about where we stand.
“We must face this with realism, coordination, and urgency. There is no shortcut. Without clear government support and industry discipline, we are looking at a severe erosion of India’s manufacturing base in gem and jewellery.”
Adil Kotwal, President, SEEPZ Gems & Jewellery Manufacturers’ Association (SGJMA)
“Retailers in the US must hear a clear, united message from Indian exporters: the duty is here to stay—at least until Christmas. If we keep giving them the impression that a bilateral trade agreement (BTA) is around the corner, they won’t adjust their retail prices. That means we’ll bear the full burden. The pricing cycle for the holiday season has already started. If we don’t communicate now, our quotes will be based on outdated assumptions, and we’ll take a hit. Also, the memo model—so central to our business—has to be reconsidered. With 32% duty payable upfront on arrival, how many of us can afford to offer memo terms? And without memo, many retailers won’t place orders. We’re staring at serious disruptions. Let’s be blunt about it and act now.”
Anil Sankhwal, Studded Jewellery Panel, GJEPC
“Duty is now part of our input cost—just like gold, diamonds, or labour. We need to treat it that way. When raw material prices go up, the customer decides whether to buy. The same applies here. But beyond that, we must think strategically. India should push for country-specific duty arrangements with the US—just as the US applies different duties based on origin. If we reduce import duties on US components and jewellery, we should get matching concessions. This puts us in a better position to negotiate fairly and protect our competitiveness in a high-duty environment.”
Vasant Mehta, Former Chairman, GJEPC
“We should be cautious not to accept 10% duty as a reasonable compromise. That would send the wrong signal. Today it’s 10%, tomorrow may be higher. We’ve seen this pattern before. Instead, the Council must argue for true reciprocity. For example, India charges 66.5% duty on cut and polished diamonds. If we’re serious about parity, why not bring it down to 2.5% and demand the same from the US? Let’s be clear: once we legitimise higher duties by accepting them quietly, we lose the chance to negotiate them down. Now is the time to push back—clearly and strategically.”
Govindbhai Dholakia, founder of Shree Ramkrishna Exports Pvt. Ltd., and a member of Rajya Sabha representing Gujarat since April 2024, advised: “The world stands on edge today due to the US tariffs, and we must take action to shield ourselves from damage. To succeed, we need to unite our voices. This isn’t just India’s challenge—it’s a global issue demanding a collective response.
“Negotiations are underway on behalf of the Indian Government – this is my first hand information since I am a member of the Rajya Sabha. For now, we need to stay patient, raise a unified voice, share constructive suggestions, and allow the main gem and jewellery industry leaders to take the lead in moving things forward.”
Ashish Mehta, Former Convener, Natural Diamond Monitoring Committee
“Let’s be realistic. Trump is unlikely to roll back duties quickly—it’s been part of his agenda from the beginning. And a bilateral trade deal with India, even under the best political equations, takes time—months, not weeks. So we have to act now. First, work with the Ministry of Commerce to move on FTA talks as fast as possible. Second, focus on saving jobs in jewellery and diamond sectors. Third, guide the industry to match production with real demand. Overproduction leads to price crashes. The reality is complex—this isn’t just about one product category. Decisions in Washington cut across sectors, and we can’t fix it with logic alone. We need to prepare for a prolonged period of disruption.”
Sabyasachi Ray, Executive Director, GJEPC
“Jewellery is not an essential commodity. We’re dealing with high-value goods—so when you suddenly add 26% duty on a million-dollar shipment, it doesn’t work. Buyers are uncertain. They don’t know if this duty will stay, drop, or go higher. That’s why exports have come to a standstill. Retailers in the US won’t accept goods under these conditions, and sellers here can’t take the risk either.
“China was just beginning to show signs of recovery—our March show in Hong Kong gave the diamond trade some optimism. But now, with fresh pressure on the Chinese economy, even that revival is at risk. The Chinese market remains fragile, and any added strain from global uncertainty can derail demand.
“In the Middle East, CEPA helped boost gold jewellery exports, but that momentum is now threatened. Gold prices have shot up, and crude prices are falling—both of which hit disposable income. If oil revenue dips, consumer spending in the Gulf could tighten. And remember, once inflation kicks in, consumers prioritise essentials. Whatever disposable income is left will decide how much they spend on jewellery. Until there’s clarity on tariffs and more economic stability in key markets like the US, China, and the Middle East, demand will remain uncertain.”
STRATEGIC GUIDELINES
- Clear Communication with US Retailers
Retailers must be informed that expecting a near-term BTA is unrealistic. Delaying price adjustments in anticipation of policy relief would jeopardise the entire pricing ecosystem.
- Pricing Revisions are Non-Negotiable
Many retailers are finalising pricing now. Quotes based on previous duty rates are no longer viable. A product previously priced at $500 may now cost $625. Retailers must accept and reflect this in their pricing.
- Rethink Memo Stock and Cash Flow
Exporters must reassess the practice of providing memo stock to US retailers. With duties now payable upfront, sustaining such practices without immediate payment is no longer feasible.
- Prepare for Market Disruption
Delays in new purchase orders and price resistance could result in 6-9 months of disruption, especially in key manufacturing hubs like Mumbai, Surat, Noida, and Jaipur.
- Requests for Government Intervention
The GJEPC urges the Indian government to:
- Allow reverse job work to keep skilled artisans employed domestically.
- Extend realisation periods from 270 days to 15 months.
- Extend the free shipping window from 90 days to 180 days.
- Unified Message to the Trade
The trade must come to terms with a new pricing reality. A $7,000 engagement ring will now retail closer to $9,000. Retailers and suppliers must share this burden to maintain sustainability.
- Legal Engagement
Exporters are encouraged to involve legal experts proactively. Past legal interventions have succeeded in alleviating policy bottlenecks, and timely action could again prove beneficial.
- Coordination with Upstream Suppliers
Dialogue with rough diamond producers is essential to understand how supply chain adjustments are unfolding at the source. Feedback from mining companies can help frame a coordinated industry response.
- Alternatives and Contingency Planning
US buyers are already exploring alternative manufacturing destinations such as Turkey, Dubai, and the Dominican Republic. A task force is recommended to explore these options and evaluate viability, costs, and timelines for potential shifts in production.
Conclusion: A Call for Unity and Strategy
The reciprocal tariff announcement is more than just a trade policy shift—it’s a wake-up call for Indian exporters, US retailers, and policymakers alike. While this development introduces considerable short-term strain, it also offers an opportunity to reshape strategies, strengthen legal and governmental engagement, and evaluate global diversification options.
The GJEPC remains committed to working with all stakeholders to ensure that Indian gem and jewellery products continue to have a strong presence in the U.S. market—despite the headwinds.