India’s Gem and Jewellery Sector Breathes a Sigh of Relief—But Is It Enough?
The India-US interim trade deal has brought a glimmer of hope to the Indian gem and jewellery industry, particularly with the announcement of zero-duty access for diamonds and colored gemstones to the US market. But here’s where it gets controversial: while this move is celebrated, it also raises questions about the long-term sustainability of the industry in the face of global trade dynamics. Let’s dive deeper.
Over the past year, the sector faced unprecedented challenges due to increased US tariffs. India’s exports of cut and polished diamonds to the US—its largest market—plummeted by a staggering 60%, from USD 3.64 billion to USD 1.45 billion. This sharp decline underscored the vulnerability of the industry to tariff fluctuations. And this is the part most people miss: the interim deal, while beneficial, is just a temporary solution, leaving the industry’s future hanging in the balance until a comprehensive agreement is finalized.
Gems and Jewellery Export Promotion Council Chairman Kirit Bhansali expressed relief, stating, ‘We are pleased with the interim zero-duty access for diamonds and colored gemstones to the US.’ However, the industry’s optimism is tempered by the urgency to address broader concerns, such as the inclusion of lab-grown diamonds and synthetic gemstones in the exemption list—a point that has sparked debate among stakeholders.
Under the interim framework, tariffs on generic drugs, aircraft parts, gems, and diamonds will drop to zero, intensifying competition among exporters. This shift is expected to bolster India’s Make in India initiative, potentially boosting employment and market confidence. Duties have already been slashed to 18%, providing immediate relief, but the industry is pushing for complete duty-free status by March when the agreement is expected to be signed.
But here’s the controversial question: Will this deal truly level the playing field, or will it leave smaller players struggling to compete in an increasingly saturated market? The Council’s appeal to include lab-grown diamonds and synthetic gemstones in the exemption list highlights a growing divide between traditional and modern practices in the industry. Is this a step toward innovation, or a threat to traditional craftsmanship?
As the gem and jewellery sector navigates this pivotal moment, one thing is clear: the interim deal is a welcome respite, but it’s only the beginning. What do you think? Is this deal a game-changer, or just a band-aid solution? Share your thoughts in the comments below—we’d love to hear your perspective!
