Impact of US Tariffs on India's Gems and Jewellery Sector: A Plea for Policy Relief
UPSC Relevance
Prelims: Indian Economy (Foreign Trade, MSMEs, Special Economic Zones - SEZs, Government Policies); International Relations (India-US trade issues).
Mains:
General Studies Paper 2 (International Relations): Effect of policies and politics of developed and developing countries on India’s interests.
General Studies Paper 3 (Economy): Indian Economy and issues relating to growth, development and employment; Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
Key Highlights from the News
The US imposing up to 50% higher import tariffs on diamonds and jewellery from India has created a major crisis for the country's gems and jewellery sector.
The US is the largest market for India's gems and jewellery exports.
Since 85% of the establishments in this sector are MSMEs (Micro, Small, and Medium Enterprises), they cannot withstand this huge economic shock. This could affect the employment of approximately 1.7 lakh workers.
To overcome the crisis, the industry is demanding that the government intervene immediately and announce a short-term relief package.
Key Demands:
Extend the export obligation period from 90 days to 270 days.
Provide more concessions for units in Special Economic Zones (SEZs) to sell in the domestic market.
Provide interest subvention and other financial and marketing benefits, similar to what was offered during the COVID period.
Gujarat, Rajasthan, and Maharashtra are the states most affected by this crisis.
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