In a 2024 review, it is learned that, until the pandemic, the UAE had been the top export market for Indian jewellery, accepting nearly half of outbound jewellery shipments from India and peaking at 67%. But in 2021 the US, which had been the second biggest importer of Indian jewellery, saw its market share surpass the UAE.
It is important to note that Indian exports to the US suffered when in 2007 the US withdrew the Generalised System of Preferences (GSP) status that applied to some key jewellery categories, notably gold rope necklaces and neck chains, and gold mixed link necklaces and neck chains.
As a result, Indian exports attracted the Most Favoured Nation (MFN) import duty of around 5-6% compared to the pre-2007 duty-free status. This caused a substantial fall in Indian exports to the US: from US$2.3bn in 2006 to US$1.3bn in 2017.
Since 2019, trade tensions between the US and China have escalated and the imposition of tariffs on Chinese exports has benefited Indian exports to the US. For instance, before the trade war, goods from both Hong Kong and China had long been subject to duties at the US MFN rate of 7%. However, a Section 301 list published in August 2019 subjected many Chinese consumer goods, including diamonds and jewellery, to an additional 10% US tariff.
This tariff has been changed a few times but today stands at 14.5%. Metals Focus’ discussions with exporters in India suggest that the duty advantage they have enjoyed over the last three years has enabled more Indian fabricators to better compete with China when it comes to US exports.
But while trade with the US increased, that with the UAE suffered due to the implementation of a 5% import duty in 2017 and 5% VAT from the beginning of 2018. This additional cost for Indian jewellery arriving in the
UAE resulted in lower margins for Indian exporters and in turn contributed to the overall decline of gold jewellery exports to the UAE.
To put this in context, from a peak of US$8.2bn in 2019, Indian exports to the UAE dropped to US$3.2bn in 2021.
Heera Zhaveraat (HZ International) A Diamond, Watch and Jewellery Trade Promotion Magazine provide dealers and manufactures with the key analytical information they need to succeed in the luxury industry. Pricing, availability and market information in the Magazine provides a critical edge.
