India Eyes EU Tariff Cuts for Jewellery Export Boom

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AuthorAnanya Iyer|Published at:
India Eyes EU Tariff Cuts for Jewellery Export Boom
Overview

India's gem and jewellery sector sees a substantial untapped opportunity within the European Union, urging for duty-free market access. Amid ongoing India-EU Free Trade Agreement negotiations, the Gem & Jewellery Export Promotion Council (GJEPC) is lobbying for the reduction or removal of current EU import duties, which range from 2.5% to 4% on gold, silver, and imitation jewellery. This move could unlock an estimated US$16 billion in export potential for Indian jewellery products.

Unlocking EU Market Potential

The Indian gem and jewellery industry is flagging a significant, yet underutilized, business opportunity within the European Union. As Free Trade Agreement (FTA) negotiations between India and the EU progress, the Gem & Jewellery Export Promotion Council (GJEPC) is actively campaigning for the elimination or reduction of existing EU import duties on Indian-made jewellery.

These tariffs, currently levied at rates between 2.5% and 4% on items like gold, silver, platinum, and imitation jewellery, are seen as a barrier to greater market penetration. Indian exporters aim to expand beyond their current strength in cut and polished diamonds, which accounted for US$1.72 billion of the US$2.7 billion in total exports to the EU in CY2024. Higher-value categories like gold and silver jewellery, with exports at US$453 million and US$85 million respectively, are poised for significant growth.

Bridging the Market Share Gap

Despite the EU's substantial annual import of US$11.37 billion in gold jewellery, India's current market share stands at a mere 4.11%, or US$468 million. A similar pattern emerges in silver jewellery, where India holds only 4.2% of the EU's US$2.47 billion import market, and a meager 2% share in the US$2.7 billion imitation jewellery segment. GJEPC estimates the untapped export potential in jewellery products alone to be as high as US$16 billion. Kirit Bhansali, Chairman of GJEPC, stated that Indian exporters can scale volumes in higher-value jewellery categories, thereby strengthening India's global trade positioning.

Policy Support and Sectoral Growth

Beyond international trade agreements, the sector is also looking towards domestic policy support. Suvankar Sen, MD & CEO of Senco Gold, highlighted the potential of mobilizing India's vast household gold holdings, estimated at nearly 24,000 tonnes, through innovative mechanisms. He also called for a review of the current 6% import duty on gold, alongside enhanced vocational training for artisans, increased technology adoption, and flexibility for Special Economic Zone (SEZ) units to serve domestic demand. Such measures, he believes, would bolster the organised jewellery sector's contribution to employment and exports.

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