India has a significant trade deficit with the United States, exceeding $43 billion between January and October 2024. The imbalance is particularly stark in the gems and jewellery sector. While the US imported $11.58 billion worth of these commodities from India, its exports to India stood at only $5.31 billion, creating a trade gap of $6.27 billion.
This imbalance has drawn attention due to US policies under President Donald Trump, who has threatened action against countries with large trade surpluses against the US. His administration has also imposed reciprocal tariffs that could further impact India’s exports.
The Gem and Jewellery Export Promotion Council (GJEPC) has recommended that India adjust its gold and silver import strategy to mitigate the trade imbalance. The proposal suggests that India partially shift gold bar imports from Switzerland to the US and silver bar imports from the UK to the US.
By making these adjustments, India could potentially reduce its trade deficit with the US while maintaining its supply of precious metals.
India imports $95.95 million worth of platinum bars annually, and the US has the largest share (16.43%). GJEPC has highlighted that platinum demand is increasing, making it another commodity where India could increase imports from the US to balance trade.
In addition to shifting imports, GJEPC has proposed reducing import tariffs on gems and jewellery commodities to ensure that India’s exports to the US remain competitive in light of potential reciprocal tariffs.
A senior GJEPC executive noted that a 1% reduction in gold, platinum, and silver bar tariffs would align India with its trade agreements with the UAE, where duties are linked to tonnage imported.
The GJEPC has clarified that reducing tariffs will not lead to an influx of foreign jewellery brands into India. Instead, it aims to create a more balanced trade relationship while ensuring that India’s gems and jewellery exports remain competitive in the global market.
The proposed strategies by GJEPC present a multi-pronged approach to addressing the US trade deficit with India’s gems and jewellery sector. By shifting gold and silver imports, reducing tariffs, and strategically aligning trade policies, India can work towards balancing trade with the US without disrupting domestic markets. However, whether these recommendations gain traction depends on government approval and the evolving global trade landscape.
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Published on: Mar 11, 2025, 2:57 PM IST
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