Recently, US President Donald Trump has raised the tax on commodities like steel and aluminium from China, to which Beijing responded with a 25% tax on several US commodities. Now, seniors in India’s diamond trade are worried that an escalation in the US-China trade will be a major concern for India’s diamond trade, Art of Jewellery reports.
The US is a major buyer of gems and jewelry from India and China. The current duty on gems and jewelry stands at 6% on imports and has not been altered. However, if Trump decides to increase the duty on items such as gems and jewelry “to check shipments from China, it will hurt India as well”, according to the report.
Praveen Shankar Pandya, a former chairman of the Gem & Jewellery Export Promotion Council (GJEPC), was quoted in the report as saying: “Though the US has not done anything with the gems and jewelry sector as of now, the escalation of trade war between the US and China has generated a bit of nervousness in all sectors including gems and jewelry”. He added that what was more disturbing to the sector was bank finance: “If finance is curtailed, then the trade cannot grow. From April it is expected that banks will tighten finance to the sector and will ask for more collaterals. That will have an impact on the sector which is a major foreign exchange earner for the country. Exports in FY19 will be at par with FY18 with no growth if this situation continues”.
