Jewelry exporters seek urgent government relief as US tariffs bite
What's the story
The Gems and Jewelry Export Promotion Council (GJEPC) has requested the Indian government to intervene with immediate relief measures. This comes after the 50% tariffs imposed by the US on Indian goods started affecting the industry. The new tariff regime came into effect on August 27, leaving many exporters in a difficult position.
Shipment impact
Exporters 'front-loaded' shipments to US, now reeling
Sabyasachi Ray, Executive Director of GJEPC, told PTI that exporters had "front-loaded" their shipments to the US in anticipation of tariff action. However, the sudden penal duty has left them reeling. He warned that if these concerns are not addressed within a quarter, it could further hurt the Indian market.
Relief measures
GJEPC submitted detailed memorandum to government on August 28
Ray stressed the need for immediate extension of credit timelines from 90 days to 180 days or more, a moratorium on installment payments, and interest equalization. He was speaking at an Indian Chamber of Commerce (ICC) conclave on the diamond industry in Kolkata. The GJEPC also submitted a detailed memorandum to the government on August 28, seeking policy, monetary, and banking interventions to help exporters withstand this disruption.
Industry impact
Tariffs likely to hit Surat hard
The US is India's largest market for diamonds, and the effects of these tariffs are likely to hit Surat hard. The city accounts for nearly 90% of the world's diamond processing and directly employs about two lakh workers. The GJEPC has also sought an extension of the export obligation period under duty-free gold import schemes from 90 days to six months for exports to the US.
Recommendations
Recommendations for addressing tariff impact on exporters
The GJEPC has also recommended a reimbursement mechanism covering 25-50% of the additional US tariffs for August-December 2025. It has asked for enhanced market access assistance to participate in global exhibitions and promote Indian jewelry abroad. The memorandum also calls for deferment of interest on working capital loans, a six-month moratorium on packing credit loans related to US exports, and reintroduction of the interest equalization scheme for exporters.
Job losses
Potential job losses and need for worker support measures
With exports slowing and orders being canceled, the GJEPC has warned of potential job losses. It has called for support measures for workers, including restructuring of personal loans, education grants for girl children, and temporary coverage under the Ayushman Bharat scheme. Despite these challenges, Ray expressed hope that this "penal tariff" would be short-lived.