Gazing impact of Trump trade tariffs to mitigate!

 

Suggesting urgent policy drive can mitigate the tariff shocks  

Colin Shah, Founder and Managing Director of Kama Jewelry suggested his perspectives to mitigate the Tariff shocks. India’s product exports to the U.S. are at risk, with estimates indicating a possible reduction this year to $49.6 billion from close to $87 billion in 2024–25 since two-thirds of value exports to the U.S. will be subject to 50% tariffs.  

This threatens India's gems and jewelry industry specially, as America is its largest market, worth over $10 billion driving almost 30% of the industry's entire global trade. Exports to America could drop by more than 50% since these tariffs are put in effect, risking both revenues and jobs in major manufacturing clusters.  

A comprehensive urgent policy drive can mitigate the tariff shocks confronting India's gems and jewelry sector, safeguard jobs and maintain its world leadership. USA tariff headwinds have threatened the Indian natural diamond, gold jewelry, and lab-grown segment demand, although collective reforms can dilute the effect and open up new growth.  

India is at a juncture to become a world, innovation-driven export destination, but there has to be immediate and definitive reforms to upheld this position. Some of the reforms and actions required are: 1: The labour laws need to be made simpler in order to ensure compliance, contract transparency, and better worker welfare which is the key to enhanced productivity and investments. 

2: The pending amendment to the SEZ Act should be notified forthwith to make SEZ units survive and remain competitive especially reverse job work. 3: For Ecommerce, India has to compete with international centers such as Dubai and Hong Kong on cost and speed so by lowering logistics compliance and streamlining payments modalities, returns, and freight rules.  

4: GST should be simplified with one-stage model to lower compliance costs and blockage of working capital, particularly for exporters on input credits. 5: On the same lines, income tax policies have to be export-oriented with lower rates, simplified transfer pricing laws, and time-bound resolution of disputes. Also, Quick refunds are critical for liquidity and competitiveness.  

6: Interest subvention on export credit, pre- and post-shipment needs to be assured for a minimum of five years to safeguard employment and assist MSMEs in handling the demand cycles. 7: Strategic BTAs with China, Brazil, South Africa, and the EU need to be expedited, emphasizing predictable rules of origin, reduced non-tariff barriers, and safeguards for high-value segments such as certified diamonds and branded jewellery.  

8: Key sectors like diamond cutting, gold jewelry, synthetic gemstones, and parts need to be facilitated by finance access, traceability standards, and compliance with international trade regulations. This would stabilize orders and promote investment.   

It is extremely important for India to position itself as a dependable, price-competitive, and policy-stable world export leader. These reforms if put to action can reduce the impact of Trade tariffs on the Indian Gems and Jewellery industry.