Kolkata: The Gems and Jewellery Export Promotion Council (GJEPC) has sought immediate relief measures from the Centre as the tariffs imposed by the US have started impacting the industry.
A 50% tariff on Indian exports to the US came into effect from August 27.
Exporters had “front-loaded” shipments to the US, anticipating tariff action, but the unexpected penal duty has left the industry reeling, Sabyasachi Ray, executive director, GJEPC, said.
Front-loading is the accelerated shipment of goods to their destination before an expected disruption, such as a tariff increase, labour strike, or other regulatory change.
“The market will be hit further if the concerns are not addressed within a quarter. A lot of demand had already been shipped to the US market before the tariff was implemented. Now the industry requires immediate extension of credit timelines from 90 days to say 180 days or more, moratorium in instalment payment and interest equalisation to provide immediate respite,” he said in Kolkata where he attended a conclave organised by the Indian Chamber of Commerce (ICC) on the diamond industry.
GJEPC figures reveal that overall gross exports of gems and jewellery witnessed an increase of 15.98 per cent to USD 2.17 billion in July, and overall gross imports grew 26.55 per cent to USD 1.8 billion.
India’s largest market for diamonds is the US, and the fallout of the tariffs is expected to be severe on Surat, which accounts for nearly 90 per cent of the world’s diamond processing and directly employs about two lakh workers.
The export promotion council submitted a detailed memorandum to the government on August 28, seeking policy, monetary, and banking interventions to help exporters withstand the disruption.
Among its key demands, GJEPC has 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, and permission for SEZ units to undertake reverse job work and offload inventory into the domestic market.
“On the monetary front, the industry has recommended a reimbursement mechanism covering 25-50 per cent of the additional US tariffs for the August-December 2025 period, and enhanced market access assistance for participation in global exhibitions and promotion of Indian jewellery abroad,” an official said.
The memorandum also calls for deferment of interest on working capital loans, a six-month moratorium on packing credit loans related to US exports, reintroduction of the interest equalisation scheme for exporters, and extension of pre-shipment finance by 90 days.
With exports slowing and orders being cancelled, GJEPC has highlighted the risk of job losses and urged support measures for workers, including restructuring of personal loans, education grants for girl children, and temporary coverage under the Ayushman Bharat scheme.
Ray expressed hope that the “penal tariff” would be short-lived.
“We believe an understanding of the larger dimensions of the India-US relationship will eventually prevail,” he added.