India is set to review overseas manufacturing bases and adjust supply chains for gems and jewellery to counter sharply increased US tariffs and protect the industry.
The Gem and Jewellery Export Promotion Council (GJEPC) held a meeting to discuss the negative impact of the sharp increase in US tariffs to 25-32% on Indian jewellery, which threatens the export segment. Industry representatives discussed legal frameworks, operational adjustments and long-term manufacturing strategies to protect their businesses.
The high tariffs threaten India’s dominance in the US diamond jewellery market. The tariff shock has already slowed shipments to the US, effectively bringing them to a standstill, threatening 60-70% of the trade. A high tariff on Indian exports could play into the hands of Thailand, Vietnam and Israel, which could take over the market share of Indian jewellers. India currently accounts for 42% of the US diamond market (over 50 percentage points), so losing even a fraction of that share could be significant.
The situation is already affecting overall gem and jewellery exports: in the 2024-25 fiscal year, total gem and jewellery exports fell by 5%, while polished exports fell by 52% year-on-year in April-June 2025. While gold jewellery exports rose in value, largely due to rising gold prices, this could not offset the sharp decline in exports, mainly diamonds.
In particular, the possibility of reclassifying the origin of products depending on where the most significant processing takes place was discussed. A possible solution for the industry is to transport wax and rubber moulds without special permissions, or for US companies to ship castings to India for installation in stone before re-import.
The meeting also considered the option of rerouting supplies through countries with lower tariffs as a short-term measure. In this context, establishing manufacturing bases in the UAE appears to be a viable long-term strategy, providing both proximities to key markets and potential tariff advantages.
Hélène Tarin, Editor-in-Chief of the Asian Bureau, Rough&Polished
