The recently concluded trade agreement between the United States and India has brought substantial relief and optimism to India's gem and jewellery sectors, particularly diamond jewellery manufacturers. This landmark deal is poised to significantly impact export dynamics and operational stability for one of India's key export industries.
Significance of the US Market for Indian Exports
The United States represents India's single largest export market for gem and jewellery products, accounting for a substantial 31 per cent of total exports in the fiscal year 2024-25. This translates to an impressive export value of US$ 9.23 billion, highlighting the critical importance of the American market for Indian manufacturers and exporters in this sector.
Immediate Benefits of Tariff Reductions
The core of the trade agreement involves significant tariff cuts that will directly benefit both US importers and Indian exporters. For American businesses importing Indian gem and jewellery products, these tariff reductions will substantially lower their procurement costs, making Indian products more attractive in the competitive US market.
For Indian diamond jewellery manufacturers, the tariff cuts provide what industry experts describe as immense relief after years of facing competitive disadvantages in international markets. The reduced tariffs will enhance the price competitiveness of Indian diamond jewellery products, potentially leading to increased demand from American consumers and retailers.
Industry Response and Future Outlook
Kirit Bhansali, Chairman of the Gem and Jewellery Export Promotion Council (GJEPC), emphasized the multifaceted benefits of this trade agreement. According to Bhansali, the deal is expected to:
- Lower operational costs for US importers of Indian jewellery
- Provide substantial relief to diamond jewellery manufacturers in India
- Boost the overall competitiveness of Indian diamond jewellery in international markets
- Help revive demand that may have been suppressed by previous tariff barriers
- Stabilize operations and provide predictability for Indian exporters
The timing of this agreement is particularly significant as the gem and jewellery industry seeks to recover from various global economic challenges. Industry analysts suggest that the tariff reductions could lead to a notable increase in export volumes to the United States, potentially creating new employment opportunities and supporting ancillary industries within the sector.
This development represents a crucial step in strengthening economic ties between India and the United States while providing tangible benefits to one of India's most important export-oriented industries. The gem and jewellery sector, which employs millions of skilled workers across the country, now faces improved prospects for growth and stability in the coming years.
