FROM THE DESK OF RAJESH BAJAJ

Changing India’s Business Dynamics

The world today is at a crossroads, navigating a rapidly changing global trade landscape. Amid tariff disruptions, the international export-import system is undergoing a significant shift. India, in particular, faces tariffs as high as 50% in some sectors. However, rather than passively accept these unilateral measures, India has chosen to take a strong stand—challenging the unfairness of U.S. trade policies and advocating for a more equitable, multilateral trading system.

Recognising the challenges ahead, the Indian government is meticulously reviewing the impact of such disruptions through a comprehensive SWOT analysis of exports. The focus is not just on sustaining current export levels but on ensuring long-term, robust growth. With a sharp eye on the economy, every measure is being carefully evaluated and implemented.

A fundamental aspect of this strategy involves the pursuit of new export markets. Under the visionary leadership of Prime Minister Shri Narendra Modi, India has already entered into several Free Trade Agreements (FTAs), with negotiations progressing with major economic blocs, including the European Union and Eurasia. These initiatives demonstrate India’s commitment to diversifying its trade portfolio and enhancing opportunities for its exporters.

Simultaneously, the government is dedicated to supporting the export community domestically. In this context, Prime Minister Modi conducted comprehensive discussions with cabinet colleagues and relevant ministries before announcing the Goods and Services Tax (GST) reforms. After this rationalisation, Finance Minister Nirmala Sitharaman indicated the potential for additional export-support measures in the near future—highlighting the government’s dual emphasis on enhancing the ease of doing business and improving the comfort of living.

This reform momentum comes at a critical time during the festive season. The recent GST rationalisation for domestic trade has been widely welcomed. The Gem & Jewellery Export Promotion Council (GJEPC), led by Chairman Kirit Bhansali, highlighted benefits for the sector, including exemption of natural cut and polished diamonds imports up to 25 cents and lowering GST on jewellery boxes from 12% to 5%.

Welcoming the reforms, Bhansali said, “These measures will boost domestic demand and ease pressure on our export supply chains, which face challenges from global issues. The diamond and jewelry industry is dedicated to passing on the savings from lower costs to Indian consumers, building trust and promoting long-term growth.”

He further expressed that a reduction of GST on domestic jewellery to 3% would be a highly desirable move for the sector. This optimism was echoed during the celebration of IIJS Premier 2025—the world’s largest jewellery fair—which recorded projected business worth between ₹70,000 crore and ₹1 lakh crore.

Currently, India’s domestic gems and jewellery market is valued at US$85 billion, with projections to grow to ₹130 billion by 2027. The rationalisation of GST rates is expected to provide additional momentum to this upward trajectory.

A significant outcome of these reforms is the anticipated increase in disposable income among India’s middle class—the primary driver of domestic consumption. Historically, India has been a savings-oriented society, with previous generations restricting their expenditures to a few key areas.

However, the new generation’s spending is diversified across more than twenty-five categories, reflecting evolving aspirations and lifestyle choices. With more money in hand, this class is likely to boost consumption, particularly during the festive season—further energising the economy.

Essentially, India’s proactive policies, visionary leadership, and bold reforms are reshaping its trade and business climate—making sure the country not only adjusts to global disruptions but also uses them as chances to boost its position in the world economy.

Before the announcement of any relief package or support measures by the Union Government aimed at enhancing India’s exports, the prominent stakeholders within the export community collectively provided a firm commitment. They assured their resilience against tariff pressures and committed to actively identifying new export markets to mitigate the effects of diminished trade with the United States.

The GJEPC, along with other major export industry organizations, has already demonstrated its commitment to exploring untapped global markets. This proactive approach showcases the resilience and confidence of Indian exporters, who are not waiting passively for government intervention but are instead taking charge of the situation.

Such collective resolve aligns seamlessly with the vision of Viksit Bharat (Developed India)—where industries, government, and stakeholders work collaboratively to fortify India’s economic foundation. The journey may present difficulties; however, through innovative strategies, the formation of new partnerships, and a spirit of self-reliance, India’s export sector is preparing to convert challenges into opportunities and to strengthen its standing within the global trade ecosystem.