Trump Tariffs: US Orders On Hold, PM Modi's US Visit Crucial For Trade Pact 

India’s exports of gems and jewellery currently stand at around US$ 33 billion, of which exports to the US alone make up US$ 10 billion. So what is keeping the exporters going?

India's domestic market for gems and jewellery is estimated at US$ 80 billion. India’s share in global exports is only seven per cent.

“We have a huge domestic market and other foreign markets to diversify. We have already started looking at alternative markets,” said Jayanti Savaliya, a Surat-based exporter of rough diamonds, who is also the regional chairman for Gujarat of Gems and Jewellery Export Promotion Council (GJEPC). Besides the domestic market, India would aggressively look at diversifying into the global market.

The industry would be hit only for about 4-6 months, but it expects other markets to make up for the loss it incurs from the dent in the US demand.

One could say that gems and jewellery exporters are shaken, but not stirred. “We knew about the August 1 deadline in April. We had taken into account that tariffs would rise. So, we exported most orders (that we usually do throughout the year) by end-July. Now only emergency orders are being processed,” Savaliya said, adding that both major exporters to the US — India and China — are facing increased tariffs.

The new 25 per cent tariffs already came into effect on August 7. The additional 25 per cent that was imposed on India for buying Russian oil — which makes India's tariff burden 50 per cent or more — will kick in from August 27, making Indian goods uncompetitive in the US market, at least for now.

While exporters in other sectors are looking to reroute their goods to the US, those dealing in gems and jewellery have no such plans. Surat is the largest hub for polishing diamonds. “In the US, we had to typically supply diamonds with a certificate of origin — stating that the sparklers used are not sourced from Russia,” he said.

However, if needed, centres like Mexico, Dubai, Thailand, Vietnam, Hong Kong, Israel and Japan could be the likely destinations if rerouting is required, Savaliya noted.

Other Sectors Hit Hard

Apart from gems and jewellery, the worst-impacted sectors are chemicals and ceramics.

Several Indian exporters engaged in these sectors are in a wait-and-watch mode, with large chunks of orders getting stalled. They have already started to look at ways to reroute Indian goods into the US — to minimise the impact of duty.

“50 per cent duty (if it comes into effect) will make Indian goods uncompetitive in the US market. So, buyers there have put orders on hold. We are also awaiting differential tariffs with competitors like China, Vietnam, South Korea, Bangladesh, Pakistan, and Turkey. Once this is clear, we will be able to make the next move,” Bhupendra Patel, member of Dyes and Intermediates Panel of Basic Chemicals, Cosmetics and Dyes Export Promotion Council (CHEMIXIL) told The Secretariat.

While many exporters, especially in the textiles sector, have started looking to reroute their goods, others are not as lucky. For example, ceramics and sanitaryware cannot be rerouted, even though the US is their third-largest export market, after the UAE and Russia.

"The transportation cost of ceramic products is very high. We can't reroute them,” said Nilesh Jetpariya, former senior vice-chairman of Chemicals, Ceramics and Allied Products Export Promotion Council (CAPEXIL).

Indian exports of ceramics and sanitaryware to the US stood at Rs 1,366 crore in 2024-25, a dip from Rs 1,900 crore the previous year. “This is because the US had already imposed an anti-dumping duty on Indian ceramic products. Otherwise, it would have been around Rs 2,500 crore,” said Jetparia.

Amid uncertainty, officials at the Commerce Ministry said efforts are on to seal the proposed trade deal. Prime Minister Narendra Modi is expected to visit the US in September, where he is slated to meet Donald Trump. Sources said that the meeting is crucial for the trade deal.