The industry has urged the Government to take urgent measures to safeguard the sector
Mumbai: US President Donald Trump’s doubling of tariffs to as much as 50% on Indian goods exported to the United States took effect as scheduled on August 27, 2025. The gems and jewellery sector is one of the worst-affected by the tariff, being an export-driven industry. The US is India’s single-largest market for gems and jewellery, accounting for about 30% — or nearly $ 10 billion — of annual exports, according to data from the Gem & Jewellery Export Promotion Council (GJEPC).
Jobs are now threatened, as the tariff dents the industry’s global competitiveness, and strains bilateral trade ties, industry experts said, urging the Government to take urgent measures to safeguard the sector.
GJEPC Chairman Kirit Bhansali told the media that imposition of 50% tariff on gems and jewellery imports from India by the US is a severe setback for the industry. “The US is our largest market, and exports during April-July 2025 had already declined 32% year-on-year to $ 2.12 billion. With the new tariff in place from August 27, we fear exports to the US could fall by over 75%, impacting polished diamonds, jewellery and coloured gemstones alike,” Bhansali said.
This threatens the livelihood of nearly 1.7 lakh workers, particularly in Surat, Mumbai, and Jaipur, he stated.
“We urge the Government to step in with urgent support measures such as a targeted ‘duty drawback’ or reimbursement scheme, relief on working capital, and permission for reverse job work and limited domestic tariff area (DTA) sales in SEZs,” Bhansali added.
All India Gem and Jewellery Domestic Council (GJC) Chairman Rajesh Rokde told the media, “It’s not merely a trade restriction, it’s a direct blow to the heart of India’s artisanal legacy. This tariff threatens to erode decades of trust and trade relations built painstakingly with American buyers.”
The abrupt tariff escalation is not just an export concern, it’s a macro-economic jolt, GJC Vice Chairman Avinash Gupta said. “The pressure on the rupee and rising gold prices will ripple through domestic markets, dampening consumer sentiment and squeezing small retailers. We’re staring at a dual crisis: weakened global competitiveness and shrinking local demand. The Government must urgently recalibrate its trade strategy to shield this vital sector,” Gupta added.
In response, the Government has raised duty drawback rates on certain jewellery and precious metal items to provide relief to exporters in the sector, hit hard by the steep US tariff.
According to a notification issued by the Department of Revenue, the duty drawback rate on silver jewellery and articles of silver has been increased from Rs 335.50 to Rs 466.76 per 10 grams. The rate on gold jewellery and articles of gold has been raised from Rs 4,468.10 to Rs 5,234.00 per 10 grams. The relief on platinum jewellery and articles of platinum has also been revised upwards from Rs 4,468.10 to Rs 5,234.00 per 10 grams.
Gem & Jewellery Exporters Seek RBI Relief
Meanwhile, the gems and jewellery sector has sought relief from the Reserve Bank of India (RBI) on repayment of bank loans. In a virtual meeting with RBI officials, industry representatives flagged concerns over delayed payments from American buyers and potential disruption in supply chains.
“We have said there will be disruption in receiving payments as new goods will not be supplied, and there could be delays in payments. In that case, banks should give us some relief on repayments of loans,” Kirit Bhansali was quoted as saying. “We told them that people in this sector are working very cautiously. We requested some relief from banks in terms of repayments.”
Bhansali said the sector also requested additional loan facilities to cushion against liquidity stress and raised concerns about job losses. “A large number of workers will also be affected. There are about 175,000 workers in Jaipur, Mumbai, and Gujarat who have taken loans for houses, vehicles and education. We have requested that EMIs be elongated and some relief given if they lose their jobs,” he said.
The SEEPZ Special Economic Zone (SEZ) in Mumbai, which employs 50,000 workers, sends 85% of its exports to the US and is seen as particularly vulnerable.
Notably, US President Donald Trump’s administration had imposed a reciprocal tariff of 25% on Indian goods entering the United States, and added an additional 25% as a punitive measure for New Delhi’s purchases of oil from Russia.
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