Mumbai’s SEEPZ Faces Crisis as US Plans New Jewellery Tariffs
US Tariffs on Indian Jewellery? SEEPZ Exporters Fear Major Setback
The Indian gems and jewellery industry is facing a potential crisis as the US government, under former President Donald Trump’s proposed trade policies, considers imposing reciprocal tariffs on jewellery imports from India.
Mumbai’s Santacruz Electronics Export Processing Zone (SEEPZ), which accounts for a staggering 85% of India’s diamond-studded jewellery exports to the US, could be hit hard if these tariffs take effect. Industry leaders are now urging the Indian government to negotiate a fair trade agreement to protect exports and jobs.
How SEEPZ Jewellery Exports Will Be Affected
US Tariffs Could Shift Business Elsewhere
If reciprocal tariffs are imposed, the US might turn to countries like France, Italy, Switzerland, Jordan, and South Korea, which offer lower or zero duties under Free Trade Agreements (FTAs).
- Jordan enjoys duty-free access to the US.
- France and Italy impose just 2.5% duty on US jewellery imports—far lower than India’s 20% import duty on US jewellery.
If the US imposes similar tariffs on Indian jewellery, exporters could lose their competitive edge, resulting in declining sales and potential job losses.
Key Statistics: India’s Jewellery Exports to the US
India is one of the largest suppliers of gems and jewellery to the US, with annual exports of nearly $10 billion, including:
- Cut & polished diamonds – $5.6 billion
- Studded gold jewellery – $2.55 billion
- Plain gold jewellery – $267 million
- Lab-grown diamonds – $831 million
- Silver jewellery – $320 million
With higher tariffs, Indian jewellery could become more expensive in the US market, pushing retailers to seek alternatives from countries with lower duties.
Industry Experts Sound the Alarm
Exports & Jobs at Risk
Adil Kotwal, president of SEEPZ Gems & Jewellery Manufacturers’ Association, warns that increased tariffs could severely damage exports and threaten thousands of jobs in India’s jewellery sector.
Similarly, Kirit Bhansali, chairman of the Gem & Jewellery Export Promotion Council, highlighted that the Indian jewellery industry supports over 200,000 workers, many from economically weaker sections, including a large number of women.
Dinesh Lakhani, global director at Kiran Gems, cautioned that rising tariffs would hurt both Indian exporters and US retailers, as higher prices could lead to lower demand—affecting businesses on both sides.
Jaipur’s Gemstone Industry Faces a Major Threat
Jaipur, a global hub for coloured gemstones, is also bracing for the impact of US tariffs.
- 150,000 gemstone cutters
- 300,000 total workers
The US is Jaipur’s largest market, and tariffs could push American buyers towards Thailand, which has a more favorable duty structure. Alok Sonkhia, president of the Jewellers Association Jaipur (JAJ), warns that such a shift could jeopardize significant US orders, putting Jaipur’s gemstone industry in crisis.
How India’s Import Duties Compare to Other Countries
One of the biggest concerns is India’s high import duties compared to other jewellery-exporting nations:
- India levies 20% duty on US jewellery imports
- The US imposes only 5.5-7% duty on Indian jewellery
- India levies a 5% customs duty on cut and polished diamonds
- The US imposes ZERO duty on these diamonds
If the US introduces reciprocal tariffs, Indian exporters could face additional duties of 5-20%, making exports less profitable and forcing companies to cut costs or explore alternate markets.
What’s Next for India’s Jewellery Industry?
1. Government Negotiations
Industry leaders are urging the Indian government to negotiate with the US for:
- A lower and fair duty structure
- Potential exemptions for key jewellery exports
- More balanced trade agreements to prevent excessive tariff hikes
2. Exploring Alternative Markets
To reduce dependence on the US, Indian exporters may diversify their markets, focusing on:
- Europe – Growing demand for luxury jewellery
- Middle East – Strong market for gold and diamonds
- China & Southeast Asia – Emerging demand for lab-grown diamonds
3. Boosting Domestic Demand
If exports to the US decline, jewellery manufacturers may increase domestic sales efforts by:
- Expanding online retail
- Introducing competitive pricing for Indian buyers
- Partnering with domestic jewellery chains
A Critical Time for Indian Jewellery Exporters
Trump’s proposed reciprocal tariffs pose a serious challenge to India’s $10 billion jewellery export industry, threatening thousands of jobs and India’s position as a global jewellery supplier.
If the Indian government fails to negotiate a fairer trade agreement, exporters may have to cut costs, seek new markets, or lose business to competing countries. As discussions unfold, industry leaders remain hopeful that a balanced solution will be reached to protect India’s jewellery exports and workers.
