US tariffs to hit Gujarat's gems-jewellery industry; won't affect pharma sector: Industry experts

Ahmedabad, Apr 3 (PTI) Industry leaders in Gujarat have said the US government's decision to impose reciprocal tariffs on Indian imports will adversely impact the gems and jewellery industry, but will not affect the pharmaceutical, textile and agro-chemical sectors much.

On April 2, US President Donald Trump announced a major new tariff policy designed to reduce the US trade deficit and boost domestic manufacturing. It announced 27 per cent reciprocal tariffs on India saying New Delhi imposes high import duties on American goods.

Former Gujarat regional chairman of the Gem and Jewellery Export Promotion Council (GJEPC), Dinesh Navadiya, the new tariffs on imports will hurt India's exports to the US.

"In 2023-24, India's gems and jewellery export to the US was USD 9.95 billion. With an annual sale of USD 89.54 billion, the US is the world's biggest market of diamonds and diamond jewellery. The new tariffs will increase the prices of our products in the US and it will eventually affect our exports to that country," Navadiya said.

From zero per cent tariffs on polished diamonds, the US has now imposed a steep 27 per cent duty. Similarly, duty on gold jewellery has been hiked from the current levels of 5 to 7 per cent to nearly 32 per cent, he said.

"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.

Pramod Chaudhary, a leading textiles manufacturer from Surat, said although the US has increased import duty on Indian textiles, it will not make a significant impact on local manufacturers because the products are largely meant for the domestic market while the export is very less.

"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.

According to former president of Gujarat Chamber of Commerce and Industry (GCCI), Natubhai Patel, the Indian chemical industry would benefit from the Trump administration's tariff policy 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 -- copper phthalocyanine (for making blue and green paints and dyes) and titanium dioxide (for making white colour) -- have been exempted from the new tariff regime by the US.

"On the other hand, the US has imposed tariffs on China-made pigments. Thus, the new tariff regime of the US will help Indian manufacturers as we will have an edge over Chinese products. Similarly, nearly 50 per cent 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," Patel, who is the Director of Meghmani Organics, said.

Viranchi Shah, spokesperson of Indian Drug Manufacturers Association (IDMA), said the US has exempted India's pharma sector from the new tariff regime.

"Import tariff on Indian medicines was zero per cent 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. PTI PJT PD NP

Source: PTI