India is preparing for an increase in U.S. tariffs, which could further hurt its struggling diamond and jewelry industries.
The administration of Donald Trump has promised to reduce the duty gap between the two countries. This move is part of a broader effort to “restore fairness in U.S. trade relationships and counter non-reciprocal trading arrangements.”
According to data from the World Trade Organization, India’s tariffs on U.S. imports currently average 12 percent. In comparison, U.S. tariffs on Indian imports stand at just 2.2 percent.
There are growing concerns that Trump may raise tariffs to match India’s 12 percent rate. Some expect this change as soon as Wednesday, April 2.
At present, India imposes a 5 percent duty on imported polished diamonds. The duty on gold, silver, and platinum jewelry is 20 percent. In contrast, the U.S. applies no tariff on loose diamonds imported from India. Gold jewelry from India is subject to a 5.5 percent to 7 percent tariff in the U.S.
Last year, the U.S. accounted for over 30 percent of India’s total gem and jewelry exports, amounting to $11.58 billion, according to the International Trade Commission.
Higher tariffs, combined with weak global demand, falling prices, and competition from lab-grown diamonds, could lead to job losses and force many manufacturers to shut down.
“A sudden tariff increase could severely impact exports, putting thousands of livelihoods at risk,” said Adil Kotwal, president of the SEEPZ Gems & Jewellery Manufacturers’ Association in Mumbai.
He urged the Indian government to negotiate for a fair duty structure. He also suggested that India consider reducing its import duty on U.S. jewelry to a more balanced level.
Kirit Bhansali, chairman of India’s Gem and Jewellery Export Promotion Council (GJEPC), warned that if the U.S. enforces reciprocal tariffs on April 2, it will significantly affect India’s exports of studded gold jewelry and cut and polished diamonds.
“We have spoken with our U.S. counterparts and asked them to lobby their government. Many American retailers and jobs depend on Indian supplies,” Bhansali said.
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