PHOTO: Prahant Designing Studio
By Newswriters News Desk
The global jewellery market is evolving at the intersection of commodity cycles, changing consumer values and rapid technological change. Rising gold prices, the expansion of lab-grown diamonds (LGDs), and growing demand in Asia have already reshaped production, design and distribution. Into this shifting landscape, protectionist trade measures from the United States — including stepped tariff actions in 2025 — have introduced a fresh and immediate shock whose ripple effects will be felt across supply chains, employment and market strategy. Reuters+1
India matters to this story on three counts: it is one of the world’s largest consumers of gold jewellery (driven by weddings and festivals), the dominant centre for cutting, polishing and manufacture of diamonds, and an increasingly large producer of lab-grown stones. In value terms, precious-metal and gem exports to the US accounted for a material slice of India’s outbound shipments — nearly $10 billion of articles of precious metals and stones in recent reporting — making the US a strategic market for many Indian exporters. India Brand Equity Foundation+1
What changed in 2025 was policy. The United States moved to impose reciprocal tariffs on a wide set of Indian imports, with initial measures in spring 2025 in the mid-20s percentage range and further escalations later in the year that saw punitive rates reach much higher levels in some product lines. The gems & jewellery sector has been a notable casualty: industry groups warned that even a tariff in the mid-20s could sharply curtail demand, while higher punitive rates would make many Indian goods uncompetitive in their largest foreign market. Reuters+1
Immediate impact: export shock and order cancellations. Indian exporters have reported a sharp fall in new US orders after the tariffs were announced, and trade bodies such as the Gem & Jewellery Export Promotion Council (GJEPC) flagged a potential collapse in shipments to the US if tariffs remained in place. For segments with thin margins — cut-and-polish diamonds, low-to-mid range gold jewellery — the extra tariff is likely to translate quickly into lost sales or the need for exporters to eat the cost, which many cannot afford. Reuters and industry briefs emphasised job risks in manufacturing hubs such as Surat and the possibility of idled capacity. Reuters+1
Short-to-medium term corporate responses. Firms and industry groups are pursuing three main routes. First, shipment acceleration and front-loading: exporters rushed consignments ahead of tariff effective dates to salvage revenues. Second, geographic diversification: there is active discussion of routing manufacturing through lower-tariff countries (UAE, Mexico) or scaling sales to non-US markets (Europe, Middle East, Southeast Asia) where tariff obstacles are smaller — a strategy that shifts costs but can preserve access to buyers. Third, product and customer segmentation: exporters may prioritise high-margin, branded, or certified items where buyers are less price-sensitive while curbing low-margin commodity sales to the US. The Times of India+1
Policy and finance responses. The Indian government has signalled relief packages and support for exporters — credit guarantees, temporary fiscal measures and negotiation with Washington — recognising the sector’s employment footprint and forex importance. Central bank and trade measures to ease working-capital stress are likely, but they do not erase the competitiveness gap created by steep tariffs. For smaller firms heavily dependent on US demand, relief can be stop-gap rather than a durable fix. Reuters+1
Structural and strategic implications for India and the global market. First, the tariffs accelerate an already-existing push to diversify export markets and climb the value chain — India will need to capture more design, branding and certification value rather than remain primarily a labour-intensive cut-and-polish hub. Second, tariffs strengthen the business case for regional manufacturing footprints: multinational retailers and Indian manufacturers may set up assembly or finishing units close to demand centres to avoid trade barriers. Third, tariffs change the economics of LGDs versus natural stones: while LGDs provide a lower-cost alternative, they too can be subject to duties; any relocation or rebadging of production will influence where lab-grown output is competitive. gjepc.org+1
Risks and upside. The main risk is persistent market share loss in the US that converts into permanent revenue erosion and job losses. Over time, sustained diversion of exports to other markets or higher domestic consumption could offset some losses — India’s large domestic market provides a partial buffer — but this requires domestic demand retention and successful market reorientation. Conversely, tariff pressure could accelerate Indian firms’ efforts to build brands, obtain global certifications, and pursue higher-value niches (bespoke luxury, sustainable jewellery) — outcomes that strengthen long-term competitiveness if they can be executed quickly. Reuters+1
Bottom line: US tariffs are not a stand-alone shock; they compound existing trends — commoditisation pressure, lab-grown disruption and changing consumption patterns — and will force rapid strategic adjustment. For India’s jewellery sector the choice is stark: absorb painful short-term losses while restructuring for higher value capture and market diversification, or risk protracted decline in an industry that employs millions and sits at the heart of both India’s culture and export economy. Reuters+1
