On August 27, 2025, the United States raised additional duties on a wide range of Indian imports — including gems and jewelry — pushing tariffs to unprecedented levels.

The move has come as a major setback for India’s jewelry sector, with Jaipur, one of the country’s leading hubs for handcrafted gems and jewelry exports, being among the hardest hit.

The sudden spike in duties has made Indian jewelry far more expensive for American buyers, causing immediate disruptions in the trade flow.

Orders Vanish, Shipments Stall: The on-ground fallout in Jaipur

According to reports, within days of the announcement, Jaipur exporters began reporting cancellations and indefinite postponements of orders. Many units have stopped dispatching shipments altogether, as the increased tariffs have rendered their products uncompetitive in the U.S. market.

Buyers, unwilling to absorb the extra costs, are either seeking discounts that erode exporter margins or shifting to suppliers in other countries. For Jaipur, which has long relied on the U.S. as a significant export destination, the abrupt halt in orders has left exporters grappling with uncertainty.

Pain points for Jaipur exporters: cashflow, inventory and livelihoods

The new tariff regime has created three major pain points for Jaipur’s jewelry businesses:

Cashflow squeeze: With payments delayed or cancelled, exporters face severe liquidity challenges, especially smaller firms that depend on quick turnover cycles.
Rising inventory: Finished jewelry pieces — including kundan sets, gemstone jewellery, and enamelled works — are now gathering dust in warehouses. These unsold stocks are tying up capital and adding to storage costs.
Threat to employment: Jaipur’s jewelry sector employs thousands of artisans skilled in gemstone cutting, polishing, and design. With exports slowing down, factory floors are running below capacity, and the risk of layoffs looms large.

How exporters are reacting — short-term fixes and longer pivots

To weather the storm, exporters in Jaipur are trying different strategies. In the short term, some have paused shipments to avoid losses, while others are renegotiating contracts with U.S. buyers to share part of the tariff burden. A few are seeking emergency credit support to manage working capital gaps.

On a strategic level, Jaipur’s jewelry businesses are pivoting towards alternative markets, including Europe, the Middle East, and Latin America.

Many are also exploring opportunities in India’s booming domestic jewellery market, especially during the upcoming festive season. In addition, industry associations are urging the government to intervene with relief measures — whether through subsidies, tax incentives, or diplomatic efforts to alleviate trade tensions.

Wider implications and what to watch next

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The impact of U.S. tariffs on Jaipur’s jewellery exporters highlights the vulnerability of traditional industries to global trade shifts. If the tariffs persist, India’s gems and jewellery exports could face long-term shrinkage, with ripple effects across supply chains, artisan communities, and local economies.

The key factors to monitor in the coming months will be the rate of cancelled versus revived orders, the government’s response in terms of relief measures, and the ability of exporters to successfully diversify into new markets.

Closing note — a city at a crossroads

Jaipur’s jewelry industry is known for its craftsmanship, heritage, and global appeal. But today, the city finds itself at crossroads.

What was once a bustling export trade with steady U.S. demand has slowed dramatically, leaving artisans, exporters, and traders in limbo.

The coming months will determine whether Jaipur’s jewellery exporters can adapt through innovation and diversification, or whether prolonged tariffs will erode the global standing of one of India’s most iconic artisanal hubs.

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