Zero-Duty US Access for Indian Gems Marks Critical Inflection Point for Sector
The gems and jewellery sector in India has received a significant boost with the announcement of zero-duty access for diamonds and coloured gemstones to the United States under an interim trade agreement framework. Industry leaders have hailed this development as a "critical inflection point" following a bruising year for exports, which saw a dramatic decline in shipments to India's largest market.
Reversing a Sharp Export Decline
This strategic move is poised to help reverse the sharp decline in shipments to the US, where cut and polished diamond exports fell by over 60% – from $3.64 billion to $1.45 billion. The decline was largely attributed to tariff-induced loss of competitiveness, making it challenging for Indian exporters to maintain their market share. Kirit Bhansali, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), emphasized the sector's difficulties, stating, "Last year has been particularly difficult for the sector, and this step restores a level playing field for Indian exporters."
Framework for Bilateral Trade Boost
India and the US announced on Saturday that they had reached a framework for an interim trade agreement, under which both sides will reduce import duties on a range of goods to enhance bilateral trade. Ashok Gajera, Managing Director of Laxmi Diamonds, highlighted the broader implications, saying, "This is a big breakthrough and will lead to more jobs. The tariff rollback will help revive exports and bring back confidence in the market."
Immediate Relief and Future Prospects
Under the new framework, duties on jewellery have been reduced to 18%, offering what the industry describes as immediate, if partial, relief. However, the GJEPC has also urged the government to include lab-grown diamonds and synthetic gemstones in the exemption list, which currently stands at 18%. Rajesh Rode, chairman of the All India Gem and Jewellery Domestic Council (GJC), noted that zero-duty access would provide Indian exporters with unprecedented entry into the US market. "This strengthens global competitiveness, improves margins, and ensures that artisans' creations reach international consumers at fair prices," he said.
Game-Changer for SMEs
Avinash Gupta, vice-chairman of the GJC, described the move as a game-changer for small and medium enterprises that form the backbone of the sector. This development is expected to not only revive exports but also foster job creation and enhance the global standing of Indian gems and jewellery. The interim trade agreement represents a pivotal step towards stabilizing and growing India's presence in the international market, offering renewed hope for an industry that has faced significant challenges in recent times.
