When the United States imposed unprecedented tariffs totalling nearly 50 per cent on Indian goods in August, it was widely seen as a severe setback for India’s export ambitions. The timing was particularly challenging, as India has been aggressively pushing its manufacturing and export-led growth strategy to position itself as a global production hub.
Among the sectors expected to be hit hardest was gems and jewellery, given its deep dependence on the US market.
A few months on, however, the initial shock appears to be moderating. While it is far too early to conclude that Indian exports have fully adapted to the new tariff regime and will survive it, recent data suggests that, after seafood, the gems and jewellery sector may be showing early signs of resilience by diversifying markets and finding alternative demand centres.
The US has historically been the single largest destination for Indian gems and jewellery exports. According to data from the Gem and Jewellery Export Promotion Council (GJEPC), exports to the US were close to $10 billion in 2023–24. The sector is also labour-intensive, supporting nearly 1.7 lakh workers across key clusters such as Surat, Mumbai and Jaipur. Given this heavy exposure, the announcement of steep US tariffs under President Donald Trump’s trade policy sparked fears of job losses, fal ..
Contrary to earlier fears, recent export numbers suggest that the sector may be weathering the storm better than expected. As per media reports citing GJEPC data, India’s gems and jewellery exports rose by 19.64 per cent year on year to $2.5 billion in November 2025, compared with $2.1 billion in the same month last year.
However, the broader picture remains mixed. During the April–November period, overall gems and jewellery exports were largely flat at USD 18.86 billion, marginally higher than USD 18.85 billion in the corresponding period last year. This indicates that while November marked a strong month, it has yet to translate into sustained growth across the financial year.
Industry leaders attribute the recent uptick to demand revival in markets outside the US. GJEPC chairman Kirit Bhansali told PTI that markets are stabilising and demand is picking up in destinations such as Hong Kong, China and the Middle East. He noted that even though performance in the US remains sluggish, stronger orders from other regions are helping offset the slowdown.
Bhansali also pointed out that exports of gold-studded jewellery have surged, partly because job work demand has increased within India. This suggests that supply chain adjustments and value-added manufacturing may be playing a role in sustaining export volumes despite external headwinds.
The emerging trend in gems and jewellery mirrors what has already unfolded in India’s seafood sector. Indian seafood exports, particularly shrimp, one of the country’s most valuable export categories, were also expected to suffer significantly under US tariffs. Instead, exporters rapidly diversified. By reopening access to Australia after eight years, restoring entry into the European Union after nearly a decade, and expanding exports to Russia and other emerging markets, seafood exporters reduc ..
A similar pattern now appears to be developing in gems and jewellery. A recent report by CareEdge observed that while exports to the US declined sharply, the fall was partially cushioned by increased shipments to the UAE, Hong Kong and China. At the same time, CareEdge cautioned that it is too early to determine whether this marks a structural reorientation of India’s export markets or merely a short-term adjustment.
The resilience seen in select export sectors has coincided with improving trade indicators. India’s merchandise trade deficit narrowed sharply to $24.53 billion in November from $41.68 billion in October, according to data released by the Commerce Ministry on Monday. The contraction was largely driven by lower imports of gold, oil and coal. However, merchandise exports rose strongly, reaching $38.13 billion in November, up 19.38 per cent year on year. While not all of this growth can be attribut ..
To cushion the economy from the impact of steep US tariffs, the Indian government has rolled out a series of measures, including consumer tax cuts, export promotion packages and labour reforms. These steps aim to improve competitiveness and support export-dependent sectors during a period of global uncertainty. However, caution is called for. While November numbers are encouraging, a single month’s performance does not confirm long-term immunity from tariff shocks.
Whether this resilience evolves into a durable shift away from excessive dependence on the US will become clear only over the next few quarters. For now, the sector’s performance offers cautious optimism rather than definitive proof that Indian exports can consistently remain immune to the impact of steep tariffs.
One clear benefit this resilience will yield for India is that the country will not finalise a trade deal under fear or apprehension, though Commerce Minister Piyush Goyal has already said India will not negotiate a deal under a deadline or a gun to its head. That's why negotiations have stretched on for months. The relative resilience of sectors such as gems and jewellery, seafood and textiles could strengthen India’s hand in ongoing trade negotiations. The U.S. Deputy US Trade Representative Rick Switzer visited India on December 10–11 to continue discussions. Both Indian and American officials have recently expressed optimism over trade talks and possibility of a deal soon.
Source Name : Economic Times