Gold stocks crashed sharply on August 26, despite the enthusiasm of festivals like Hartalika Teej and the onset of the Onam festival. The 11-day-long Ganesh Chaturthi festival is also set to stir demand for gold from August 27. However, gems and jewellery stocks faced sharp selloffs due to intense broader bearish market, which emerged after US President Donald Trump imposed additional 25% tariffs on Indian products, effective from Wednesday.
Gems & Jewellery Stocks:
At the time of writing, stocks like Ethos, Goldiam International, Motisons Jewellers, Rajesh Exports, PN Gadgil Jewellers, and Vaibhav Global dropped by 2% to 4% significantly. PC Jewellers was alone down by 3.50% on NSE. Meanwhile, Kalyan Jewellers plunged over 1.3%. Senco Gold struggled with marginal downside.
The largest gems and jewellery stock Titan Company also tumbled by nearly 1%%.
US-India Tariffs:
President Donald Trump imposed additional 25% duty on Indian products effective August 27, 2025.
As per the US Customs and Border Protection (CBP) latest notice, the new tariff will be imposed on several Indian exported products such as textiles, gems and jewellery, leather, machinery, furniture and marine products. However, items like steel, copper and aluminium and sectors like pharmaceuticals, electronics and automobiles including passenger vehicles like SUV and sedan were exempted.
How US Tariffs Will Impact Indian Gems & Jewellery Sector?
"Now, with the Russia-Ukraine war lingering, the 25% penal tariff on India for buying oil from Russia, is likely to come into effect from August 27th onwards. Even though 50% tariff is unlikely to significantly impact India's growth, there will be adverse impact on India's exports and loss of jobs in labour-intensive sectors like textiles, gems and jewellery and leather," said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
Data from ICRA showed that India accounts for 90% of the CPD produced across the world and is the major polishing hub across the globe. The US and China (exports routed through Hong Kong) remain the primary destinations for India's polished diamond exports.
Of the total CPD exports in FY2025, 36% was directly exported to the US. Around 42% of exports from India were to trading hubs including Hong Kong, the UAE and Israel, a large chunk of which further gets exported to the US, as per the data.
Further, ICRA's earlier note said, "The import tariff of 25% by the US shall adversely impact the overall quantum of direct Indian CPD exports to the US, especially given the relative higher tariffs vis-à-vis other competing nations. In case these elevated tariffs continue for long, Indian diamantaires may shift exports to trading hubs like Dubai, Belgium, Israel to re-route to the US (given the lower import tariff for these countries), provided trans-shipment tariff is not imposed. The imposition of trans-shipment tariff can further impact the CPD industry."
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