Trump tariff puts Indian jewellery jobs on the chopping block

India’s gems and jewellery industry, one of the country’s top export earners and a major source of employment, is staring at job losses after US President Donald Trump announced a 26% tariff on imports from India. The US is the sector’s largest market, and with demand expected to fall sharply, exporters fear that the move will put thousands of livelihoods at risk.

In the last financial year (FY24), India exported about $33 billion worth of gems and jewellery, of which nearly $10 billion went to the US, according to official data. The new tariff would raise the current US import duty from around 6% to about 34%, making Indian products significantly more expensive for American buyers, said industry players.

The Indian gems and jewellery sector is the country’s third-largest export to the US, after engineering and electronic goods. It employs millions of people, many of whom are involved in labour-intensive work such as diamond cutting, polishing, and jewellery crafting. India is also the global leader in diamond processing, handling about 90% of all cut and polished diamonds in the world.

However, the industry is already under pressure due to falling demand from China, with exports dropping 14.5% in 2023-24. The added strain from the US tariff hike could push the industry into deeper trouble.

Industry leaders have warned that unless India and the US can agree on a trade deal that favours this sector, exports to the US could fall between 30% and 50%. Such a drop would likely trigger a reduction in jobs, especially among small workshops that depend on US demand to stay afloat.

“Over the past few weeks, we expected some hike in tariff by the US on gems & jewellery exports from India. We were preparing for a 10-15% hike. But 27% is too high a rate,” Colin Shah, founder & MD, Kama Jewelry, told ToI. “This will lead to a steep hike in cost for these Indian products for US buyers which in turn would affect demand.”The Gems & Jewellery Export Promotion Council (GJEPC) also raised concerns about the impact of the tariff hike on both exporters and consumers. “The Trump administration’s announcement of a reciprocal tariff on Indian gem and jewellery exports to the US would be a significant burden on Indian exporters and American consumers alike,” the council said in a statement.Industry insiders say the sharp increase in cost could price Indian diamonds and jewellery out of the reach of many in the US market, potentially opening the door to rival exporters.