The US retaliatory tariffs are a major setback for the Indian gems and jewellery exports, apex industry body GJEPC said on Thursday as it urged the Union Government to take steps to secure the long-term interests of the sector.

The US has announced 27 per cent reciprocal tariffs on India, saying New Delhi imposes high import duties on American goods, as the Donald Trump administration aims to reduce US trade deficit and boost manufacturing.

The Trump administration’s announcement of a 27 per cent reciprocal tariff on India would be a significant burden on Indian exporters and American consumers alike, the Gem and Jewellery Export Promotion Council (GJEPC) said in a statement here.

“In the long term, we foresee a reshaping of the global supply chains. In the short-run, we anticipate challenges in sustaining India’s current export volume of USD 10 billion to the US market.

“We urge the government of India to speed up the Bilateral Trade Agreement between India and the US, as it will be crucial in navigating the tariff issues and securing long-term interests of the sector,” GJEPC added.

The US imports gems and jewellery valued at USD 11.58 billion from India while its exports to India in this regard total USD 5.31 billion. The total bilateral trade between the US and India in the gems and jewellery sector is USD 16.89 billion.

Bilateral trade between India and the US includes natural and lab-grown polished diamonds, gold and platinum jewellery, silver jewellery, imitation jewellery, rough diamonds, rough LGD, rough coloured gemstones, gold and silver as well as platinum bars and coloured gemstones. Kama Jewelry MD Colin Shah said US retaliatory tariffs are a big setback for India. “While in the broader sense, it will be 27 per cent, the gems and jewellery sector will be the most affected as import tariffs may go up to 20 per cent from the current zero per cent on loose diamonds and 5.5-7 per cent on gold jewellery,” Shah said.

Shah further noted that the US is one of India’s largest jewellery export markets, accounting for almost 30 per cent of the share. Indian jewellery exports to the US are over USD 11 billion per year.

Experts said the retaliatory tariffs will significantly impact India’s diamond and jewellery sector — a cornerstone of its exports to the US, said the Council.

“India currently imposes a 20 per cent import duty on gold, silver, and platinum jewellery from the US. Efforts should be made to rationalise import duty as well as balance trade with all major nations. Import duties help protect local industries, but the retaliatory tariffs will end up negating this step by most governments,” he added. Echoing similar sentiments Saurabh Gadgil, Chairman and Managing Director, PNG Jewellers, said the tariff imposed by the Trump administration will hit Indian jewellery exporters.

“As far as domestic consumption of gold is concerned, neither is India an importer of gold nor jewellery from the US. So, as far as PNG Jewellers’ business is concerned, we won’t face any impact,” he said. He added that on the contrary, the US imports a lot of goods and commodities from Asia, which will invariably become more expensive now.

Therefore, there remains a catch on the Trump administration’s objective of bringing in more dollars to check their debt, as the prices of the same goods, now expensive, may cause inflation in the US and further slow down the US economy, he noted.