A US Federal court ruling to block President Donald Trump’s ‘Liberation Day’ tariffs has come as a major relief to gem and jewellery exporters even as the uncertainty over demand revival still lingers.

In a ruling delivered on Wednesday, a three-judge panel at the Court of International Trade in Manhattan declared the executive orders issued on April 2 as ‘unlawful.’ These orders had introduced a 10 per cent baseline tariff on most goods entering the US and higher duties on imports from countries with large trade surpluses such as China and the European union.

Suvankar Sen, MD & CEO, Senco Gold said that the US court decision will help jewellery exports from India in the short run till steps are taken by the US government.

While the global demand has been impacted by economic uncertainties and geo-political crisis, he added that the domestic demand has been comparatively muted post Akshaya Tritiya with a limited number of weddings. However, he said in terms of value the growth remains robust due to higher gold prices but volumes are impacted.

The US initially announced a 26 per cent reciprocal tariff on Indian gem and jewellery exports, which was later delayed to July 9. The tariff, initially scheduled for April 9, was a significant change from previous tariffs of 6 per cent.

In FY24, India’s total exports were at $33 billion, of which US accounted for $10 billion or 30 per cent of exports. About 64 per cent or about $3.5 billion of jewellery exports from SEEPZ are shipped to the US market. The increase in tariff had raised upfront duties on shipments from $60,000 to $3,20,000 per million-dollar consignment, putting tremendous pressure on exporters’ cash flows.

Prithviraj Kothari, Managing Director, RiddiSiddhi Bullions said though the long-term effects are still unknown, the temporary halt on US reciprocal duty on Indian gem and jewellery imports will offer some respite.

In FY26, the industry targets exports to hit $32-35 billion but it depends on many variables including the ongoing supply of natural diamonds and world-wide demand, he said.

In a bid to boost diversification, he added that the recent Free Trade Agreement signed with UK is expected to increase jewellery exports to that country to $2.5 billion from the $941 million over the next two years.

Rajesh Rokde, Chairman, All India Gem and Jewellery Domestic Council said that the ongoing tension between the US and China will directly benefit India and the removal of reciprocal duty can help exports grow four-fold.

“The right coordination between the government, the export council and domestic council (GJC) can yield excellent results as GJC has the highest representation under the MSME category,” he added.

Published on May 29, 2025