India’s gems and jewellery sector hopes to tap a $1-billion export opportunity arising out of the ongoing trade war between the United States (US) and China, reports Business Standard.
The opportunity came India’s way after the US levied a 10 per cent import duty on import of gems and jewellery from China, taking the tariff to 20.5 per cent. A few months ago, the US imposed a 5.5 per cent tariff on import of jewellery from India which still leaves the country with a 15 per cent advantage over China.
China exports around $2 billion worth of gems and jewellery to the US. But, in the absence of policy support from the government, industry has failed to grab the export market share that competing countries like Thailand and Vietnam have succeeding in.
“Given that Thailand and Vietnam have already started grabbing the opportunity emerged after the US-China trade war, we are looking at a $1-billion opportunity for India while the remaining will go to other South East Asian countries,” said Colin Shah, vice-chairman, Gems and Jewellery Export Promotion Council (GJEPC), India’s premier jewellery export promotion body under the Ministry of Commerce.
The US is the largest consumer of gems and jewellery in the world contributing nearly 40 per cent of the global production.
In order to lure US jewellery consumers, GJEPC recently organised a buyer-seller meet which was attended by 23 leading jewellery players in the United States.
Many Indian jewellers showcased their innovations to attract US business which otherwise would have gone to China. Two similar events are scheduled to be organised this year.
India’s annual gems and jewellery export to the US stands at $10 billion. If India can tap the opportunity, its overall exports to the US could jump by 10 per cent to $11billion this year.
India’s export fell 11.2 per cent to $2.7 billion in July 2019 compared to a year ago while overall exports in the first four months of this financial year fell 9.32 per cent to $12.15 billion.
Several Chinese jewellery manufacturers, irked by high tariff, have put out some feelers to Indian industry on moving their operations to India if the government provides support by relaxing norms governing special economic zones. US buyers are looking at India favourably as the country already exports $10 billion worth of jewellery there. Many jewellery however retailers have started lowering their inventory in anticipation of weak demand next year with elections due in the US.