‘Trump’s tariffs could kill 1.5 lakh jobs in gems and jewellery industry’

India’s gems and jewellery industry — a pillar of the country’s export economy and a source of livelihood for millions — is grappling with an unprecedented setback. A total of 50% import tariff announced by US President Donald Trump has dealt a severe blow to this sector, which alone absorbs over a third of India’s diamond exports and nearly half of its studded jewellery.The repercussions are already being felt across key hubs like Surat, Jaipur, Mumbai and its surrounding areas, where trade volumes are shrinking and job losses are mounting. In Gujarat’s Saurashtra region alone, an estimated 100,000 workers have lost their jobs, particularly in smaller manufacturing units in Bhavnagar, Amreli, and Junagadh, according to the Gujarat Diamond Workers Union. With export orders drying up, many businesses are slashing output and laying off workers.India, the world’s top diamond exporter, processes about 90% of all diamonds globally. In the 2024-25 financial year, it exported $10 billion worth of gems and jewellery to the US, led by cut and polished diamonds.Industry leaders are now pressing the Indian government to accelerate trade negotiations and roll out targeted support measures to cushion the blow and stabilize the sector.In an interview to TOI+, Kirit Bhansali, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), said that exports to the US could nosedive from $9.23 billion to just $2.3 billion, with the worst-hit segments being polished diamonds and studded gold jewellery.He also underscored the sector’s efforts to diversify export destinations and remain globally competitive, while noting that relocating manufacturing operations abroad is not a feasible solution in the near term.How will the US tariffs impact India's gems and jewellery exports, particularly in key segments like diamonds, gold, and studded jewellery?In the short term, exports to the US are projected to decline by more than 70%. In 2024-25, the US market accounted for $9.23 billion, representing over 30% of India’s total gem and jewellery exports valued at $28.7 billion. Going by the specific commodity, the US market accounts for over a third (38%) of the country's diamond exports and almost half (over 45%) of its studded jewellery exports.Given this considerable reliance on the US market, the increased tariffs are expected to have a significant impact on key segments such as diamonds and studded jewellery. After the hike in tariffs, what is the total payable tariff on exports of gems and other jewellery. Can you explain the change in tax rates with an example?If a diamond is exported at ₹1000, the tariff adds ₹500, making the final landed cost ₹1,500 in the US.How big is the US market for us? Which are the other top markets?The US is India’s largest market. Other key export destinations include the UAE and Hong Kong, which also contribute significantly to India’s global trade in this sector.Can you quantify the potential revenue or volume loss due to these new trade restrictions?India’s gem and jewellery exports to the US could drop sharply from $9.23 billion to just $2.3 billion, with major losses expected in polished diamonds and studded gold jewellery segments.In case of a decreasing order book, what will be the impact on employment in this sector?Employment in certain segments such as diamonds in Surat, studded jewellery in Maharashtra, and coloured gemstones in Jaipur may face some pressure. While it is difficult to provide an exact estimate, preliminary assessments suggest that up to 1.5 lakh jobs could potentially be affected over time. There has been a war-like situation in some parts of the world for the past few years. What kind of impact has the sector seen?Geopolitical concerns and global uncertainty have led to a sustained drop in demand across key markets. The recent US tariff hike has further worsened the situation, putting additional pressure on exports and impacting the overall recovery of India’s gem and jewellery sector.Have you noticed any decline in demand or a shift in buyer behaviour from American retailers or wholesalers because of these tariffs?It’s too early to observe a clear trend, but a decline in demand and a shift in sourcing behaviour from US retailers and wholesalers is anticipated, especially as they look for cost-effective alternatives due to the higher tariffs. What suggestions has the GJEPC made to the government to mitigate the impact of these tariffs for Indian exporters?As the Government of India is negotiating a bilateral trade agreement with the US, GJEPC has simultaneously proposed several relief measures to support exporters during this period, including:- Duty Drawback/Reimbursement Scheme covering 25–50% of the new US tariffs (Aug–Dec 2025). The scheme allows rebate of duty on any goods manufactured in India and exported.-Deferment of interest on working capital for 6 months (Aug 2025–Jan 2026)-Extension of pre-shipment loan due dates by 90 days without penalties-Reintroduction of the Interest Equalisation Scheme to offset high borrowing costsThese measures aim to cushion the sector against financial stress and maintain India’s export competitiveness.Do you see potential in diversifying India’s export destinations to reduce dependence on the US market? If yes, which regions show promise?Yes, there is strong potential to diversify. GJEPC is actively exploring new markets, with initiatives like the upcoming Saudi Arabia Jewellery Exhibition (SAJEX) aimed at tapping into emerging regions such as the Middle East. These efforts are focused on reducing reliance on the US and expanding India's global footprint.There is talk of manufacturers relocating their operations to other countries like UAE. How will that pan out?It is advisable not to rush into such decisions. While countries like the UAE offer lower tariffs and a favourable business environment, relocating operations involves significant costs and risks, especially when India already has a strong and established manufacturing ecosystem.The Government of India is actively negotiating a bilateral trade agreement with the US, which could help mitigate the current tariff impact. Until the outcome of these negotiations is clear, it is best to wait and watch rather than make premature changes that could have long-term consequences.