NewsCorporate ActionsGovernment Boosts Jewellery Exports with Revised Duty Drawback Rates Amid US Tariff ChallengesGovernment Boosts Jewellery Exports with Revised Duty Drawback Rates Amid US Tariff Challenges
The Indian government has increased duty drawback rates for gold, silver, and platinum jewellery exports in response to a 50% tariff imposed by the US on Indian jewellery shipments. Silver rates increased by 39.12% to ₹466.76 per 10 grams, while gold and platinum rates rose by 17.14% to ₹5,234.00 per 10 grams. This move aims to support exporters facing challenges in the US market, India's second-largest destination for gems and jewellery exports. The sector exported $9.94 billion to the US last fiscal year, representing nearly one-third of India's total gems and jewellery exports of $29.8 billion. Industry representatives welcome the move but suggest more support may be needed to maintain competitiveness against rivals like Turkey and Thailand.
*this image is generated using AI for illustrative purposes only.
In a strategic move to bolster the gems and jewellery sector, the Indian government has announced an increase in duty drawback rates for gold, silver, and platinum jewellery exports. This decision comes as a response to the steep 50% tariff imposed by the United States on Indian jewellery shipments, set to take effect from August 27.
Revised Duty Drawback Rates
The revised rates mark a significant increase across all three precious metal categories:
| Metal | Old Rate (per 10 grams) | New Rate (per 10 grams) | Increase |
|---|---|---|---|
| Silver | ₹335.50 | ₹466.76 | 39.12% |
| Gold | ₹4,468.10 | ₹5,234.00 | 17.14% |
| Platinum | ₹4,468.10 | ₹5,234.00 | 17.14% |
This adjustment aims to provide much-needed support to exporters facing challenges in the US market, which is India's second-largest destination for gems and jewellery exports.
Impact on the Sector
The gems and jewellery sector plays a crucial role in India's export landscape:
- Total exports to the US in the last fiscal year: $9.94 billion
- This represents nearly one-third of India's total gems and jewellery exports, which stood at $29.8 billion
Industry Response
Vipul Shah, representing the Gem and Jewellery Export Promotion Council, welcomed the government's move but emphasized that more support might be necessary to maintain export momentum. Industry representatives have stressed the importance of sustained assistance to keep Indian exporters competitive against rivals such as Turkey and Thailand, which currently enjoy lower tariff barriers in the US market.
Challenges and Outlook
The 50% tariff imposed by the US poses a significant challenge to Indian jewellery exporters. This move by the Indian government to increase duty drawback rates is seen as a step towards mitigating the impact of these tariffs. However, the industry's call for further support indicates that the sector may need additional measures to navigate the changing global trade landscape effectively.
As the new tariffs and duty drawback rates take effect, all eyes will be on how India's gems and jewellery sector adapts to these changes and maintains its strong position in the global market, particularly in the face of increased competition from countries with more favorable tariff structures.
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