India’s gems and jewellery industry is facing challenges as the United States introduces its “Fair and Reciprocal Trade Scheme.” Kirit Bhansali, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), warned that India may need to adjust its policies to maintain its strong presence in the US market. India currently holds a significant share of US imports, including 45.09% of cut and polished diamonds, 24.61% of gold jewellery, and 92.17% of lab-grown gemstones.
In February, the GJEPC reported a 23.49% decline in India’s gems and jewellery exports compared to the previous year, with demand from both the US and China dropping. Bhansali noted that the situation did not improve in March as the decline continued.
Despite these setbacks, Bhansali is optimistic about a recovery. India recently participated in two jewellery shows in Hong Kong, strengthening trade ties with the region. Additionally, the Chinese diamond market is recovering, offering India the opportunity to increase diamond exports to China.
India’s gems and jewellery exports to the US fell by 16.5%, totaling $631.33 million between February 2024 and February 2025. In contrast, exports to China rose by 13.91%, reaching $9.49 million. Bhansali sees stabilising diamond prices and recovering demand in China as positive signs for the global industry. India’s robust manufacturing base and adaptability position the country to capitalize on this long-term growth potential.
As countries like Hong Kong and China show renewed interest in trade with India, US tariffs could play a critical role in determining India’s export outlook. The US has a $6.27 billion trade deficit with India in this sector, a gap that the Trump administration is keen to reduce. India, which exports nearly $10 billion worth of gems and jewellery to the US annually, could face tariffs ranging from 5% to 20%, which would pose a significant challenge to the industry and its workforce of over 200,000 people. “But I hope that India can protect our interests,” Bhansali said.
Strong Domestic Market Amid Global Recession
While several sectors have faced a decline in consumption, Bhansali highlighted that the domestic gems and jewellery market remains strong. Despite global recessions in China and the US, India’s domestic economy continues to perform well. The surge in gold prices has not deterred Indian consumers, and Bhansali expects the domestic market to grow further, driven by the upcoming wedding season and a promising festive season.
Bhansali dismissed concerns that investors might shift from physical gold to gold exchange-traded funds (ETFs) or gold bonds. “Indians prefer buying physical gold,” he explained, especially in tier-II cities and beyond.
The recent budget’s tariff cuts have been seen as a positive step, with Bhansali suggesting that further cuts could be possible. He also pointed to the growing importance of e-commerce in the jewellery sector. Though still in its early stages, e-commerce is expected to boost exports alongside growing domestic retail. The GJEPC is exploring partnerships with more e-commerce players and is in talks with various parties.
Karnataka’s Jewellery Park Proposal
In a move to strengthen the jewellery sector, Karnataka’s Minister for Large and Medium Industries, MB Patil, proposed allocating land near Bengaluru International Airport for a large jewellery park. Bhansali confirmed that the GJEPC will conduct a survey to assess the feasibility of such a project, with the goal of creating a jewellery park or a similar localisation initiative.
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