US President Donald Trump’s decision to double tariffs on Indian imports to 50% has alarmed the Indian gem and jewellery industry, which is now looking at setting up manufacturing units in low-tariff countries like UAE and Mexico to continue exporting to the US.Calling the move a “doomsday” for the sector, Gem & Jewellery Export Promotion Council (GJEPC) Chairman Kirit Bhansali told ET that, “We will reroute our products through other countries after studying the tariff structure of that country with the US. We will set up manufacturing units there quickly.”“Dubai is the nearest destination for us. We will also look into rerouting studded jewellery through Mexico, if required. However, we will do everything legally,” Bhansali added.By comparison, the United Arab Emirates faces only a 10% tariff, while Mexico is subject to a 25% duty, significantly lower than India’s new rate.US is India’s largest market for polished diamonds and studded jewellery worth $10-billion as of 2024–25. Titan Company, one of India’s largest jewellers, is reportedly considering relocating some of its manufacturing to the Middle East to maintain access to the US market under lower tariffs.Bhansali further noted that when tariffs were at 25%, exporters were trying to adjust margins to stay competitive. “But now with a 50% duty, it has simply become impossible for us to survive,” he added.In the meantime, a delegation from the US gem and jewellery industry is scheduled to visit India on August 19 to discuss the tariff issue with Indian industry leaders and officials from the commerce ministry, ET reported.While the new tariffs will hit future exports hard, current shipments already in transit are safe. “There are no orders from the US now. The little bit orders that we got before August 7 have been shipped,” Adil Kotwal, President of SEEPZ Gems and Jewellery Manufacturers Association told the outlet.SEEPZ in Mumbai hosts 200 exporting units and employs around 1 lakh workers. The industry fears mass disruptions if alternative manufacturing routes are not set up soon.
