Trump Tariffs To Hit Gujarat's Gems, Jewellery Sector Hard
However, the tariffs won't have much impact on textiles, while pharma has been exempt, and chemical sector stands to benefit.
The US government's reciprocal tariffs on goods exported from India will affect the gems and jewellery space negatively, as they specifically target the sector, according to industry leaders in Gujarat.
However, they opine that the tariffs will not affect the pharmaceutical, textile and agro-chemical sectors much. Among those that were exempted from the new tariffs include products like some chemical pigments, and pharma products.
From 0% To 27% Tariffs
According to Dinesh Navadiya, former Gujarat regional chairman of the Gem and Jewellery Export Promotion Council, the new tariffs on imports will hurt India's exports to the US.
He said, "The new tariffs will increase the prices of our products in the US and it will eventually affect our exports to that country."
Highlighting the importance of the US for India's gems and jewellery sector, Navadiya said, "With an annual sale of $89.54 billion, the US is the world's biggest market of diamonds and diamond jewellery. In 2023-24, India's gems and jewellery export to the US was $9.95 billion."
"Gujarat is the biggest centre for cutting and polishing diamonds. Hence, the new tariffs will definitely impact our exports because our products will become expensive in the US, which may lower the demand," said Navadiya
Not Much Impact On Textiles
Though the US has hiked import duty on Indian textiles, it will not affect local manufacturers much, as bulk of their products cater to the domestic market and export very less, said Pramod Chaudhary, a leading textiles manufacturer from Surat.
"Moreover, textiles are first exported to Bangladesh and South American countries for making garments, which are then exported to the US. New taxes on India and other countries that buy Indian textile to make garments may leave a negative impact on the exports but I am hopeful that the industry will cover that difference," he said.
Chemical Sector To Benefit
The Trump administration's tariff policy will benefit the Indian chemical industry, said Natubhai Patel, former president of Gujarat Chamber of Commerce and Industry. This he said was, because many Indian products, such as pigments for making white, blue and green colours, have been exempted.
Two main colour pigments exported to the US by India have been exempted from the new tariff regime by the US. These are copper phthalocyanine, which is used for making blue and green paints and dyes, while titanium dioxide is used for making white colour.
Pointing out that "the US has imposed tariffs on China-made pigments", he said, "the new tariff regime of the US will help Indian manufacturers as we will have an edge over Chinese products".
Patel, who is the Director of Meghmani Organics, added, "Similarly, nearly 50% of Indian agro-chemical products are exempted by the US, but no similar relief has been given to China. Hence, it will ultimately benefit us."
Indian Pharma Exempt
Meanwhile, Viranchi Shah, spokesperson of Indian Drug Manufacturers Association, said the US has exempted India's pharma sector from the new tariff regime.
"Import tariff on Indian medicines was 0% in the past and there is no change in that policy by the US. This might be the result of our medicine diplomacy. We did a commendable job during COVID-19 by supplying vaccines to the world. This exemption also establishes that our future in pharma export is bright," Shah said.
(with PTI inputs)
