RAPAPORT… India’s gold-jewelry exports to the US have fallen over the past decade and a half following an erosion of the Asian country’s preferential trade status, according to a report by industry leaders.
Competitors in the Far East, Europe and the Middle East have captured market share from India since 2007, the Gem & Jewellery Export Promotion Council (GJEPC) said Tuesday. The shift correlated with decisions by successive US administrations to revoke the country’s special duty rates, the organization argued.
“The situation seems to be unfavorable for the Indian gem and jewelry sector,” the GJEPC said. “Withdrawal of the [tax benefits] led to a rise in import duty in the country, further reducing the export competitiveness for Indian exporters as compared to other countries. This is one of the primary reasons for India’s declining share in US imports of gems and jewelry products.”
The GJEPC released the report on the state of the trade relationship with the US this week after the Indian Embassy in Washington, DC, “cautioned” it late last year over sluggish jewelry exports, the council noted. India’s exports of gold jewelry to America fell 22% from $1.9 billion in 2007 to $1.49 billion in 2019, while orders of gold necklaces and neck chains slid 58% from $267 million to $113 million, according to GJEPC data.
During the same period, France’s shipments of gold jewelry to the US more than tripled from $246 million to $854 million, while Oman’s exports more than doubled from $61 million to $160 million. Meanwhile, Indonesia, Turkey and Italy also increased their share of the gold-necklace market.
The sharp drops began in 2007, when the US withdrew India’s “competitive need limitation waiver” for certain gold jewelry — a special concession allowing it to keep low duty rates despite exceeding an export limit. The US then canceled the waiver on other gold items in 2009. In 2019, it abolished India’s designation as a beneficiary developing country, which had previously given it tax advantages.
The decline was absent in loose polished diamonds, which do not attract import levies.
Image: Jewelry manufacturer in Jaipur, India. (Shutterstock)
Source: diamonds.net Rapaport