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U.S. Tariffs Hit India’s Diamond Sector
Context:
The United States has imposed 50% tariffs on India’s cut and polished diamonds and 50–57% tariffs on studded and non-studded jewellery, severely impacting India’s gems and jewellery exports.
India’s Export Dependence:
- S. is the largest market for Indian diamonds and jewellery.
- Exports (2024–25): Diamonds worth ?46,000 crore and studded gold jewellery worth ?23,000 crore.
Employment Impact:
- Industry employs 2 lakh skilled workers.
- Tariffs expected to affect 7 lakh jobs.
MSME Vulnerability:
- 85% exporters are MSMEs, unable to absorb sudden loss of U.S. market.
- States worst affected:Gujarat, Rajasthan, Maharashtra.
Reliefs Sought by Industry:
- Extend export obligation period from 90 ? 270 days.
- Allow reverse job work in SEZs and permit SEZs to sell domestically with duty foregone.
- Monetary incentives: interest subvention (as during COVID), subsidised exports, liquidity packages.
- Worker support: loan restructuring, healthcare coverage.
- Marketing support: funds for exploring new markets.
Urgency & Bailout:
- Disrupts a five-decade-old trade relationship.
- Industry estimates relief package at ?500 crore.
- S. accounts for 30% of India’s gems and jewellery exports, mostly supplied by MSMEs.
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