India in the smaller sizes remain a high demand: TAGS

 

Unrealistic for US to cut India out of their supply chains completely 

In the TAGS September Market & Tender Report, Trans Atlantic Gem Sales (TAGS) said, while TAGS has continued to run regular tenders each month since our last report in May, and opened our new TAGS tender facility in Johannesburg, it has been against a background of ongoing turmoil, due to tariff threats and geopolitical uncertainty. 

In Q1 the market saw signs of green shoots, that were extinguished in April with the potential of 25% tariffs (subsequently revised to 50%) on US imports affecting polished diamonds from India.

Since then, the market has operated under a cloud of uncertainty, in the hope that some kind of agreement would be reached between India and other countries trading with the US, on the levels of tariffs to be imposed. However, despite all efforts tariffs on Indian imports doubled to 50% effective 27 August.  

This move has escalated tensions between the world two largest democracies and strategic partners. This followed several rounds of talks, during which Indian government officials, had at times signaled optimism that US tariffs might be capped at 15%, in line with some other major trade partners, such as the EU, Japan and South Korea.  

The impact of tariffs on India will be felt throughout the entire value chain, and influence market dynamics, sourcing strategies and pricing. The current 50% tariff could cripple future exports and displace thousands of skilled workers within India’s $40 billion Gem and Jewellery sector.  

It remains unrealistic for US jewellers to cut India out of their supply chains completely, and while some Indian manufacturers are looking into the possibility of developing some capacity in other countries, it will never match the scale, experience, or viability offered in India with over 6 decades of experience, particularly in the smaller sizes which remain a high demand article in America.