Export of cut and polished diamonds from India to the United States is expected to be hit following President Donald Trump’s decision to withdraw benefits under Generalised System of Preference (GSP).
According to rating agency CRISIL, Indian exports of cut and polished diamonds to the US will be costlier by around 7-8 per cent following the withdrawal of GSP benefits. The US accounted for nearly half of the total of India’s export of cut and polished diamonds valued at nearly $24 bn.
Indian diamond exporters who are already affected by low credit facilities from lending banks will be hit hard by the withdrawal of GSP benefits to India, including US’s decision to remove all distinction between natural and manmade diamonds. From 2007 2019, the US has been raising tariffs against Indian exports of gem and jewellery reducing India’s exports by nearly 25 per cent in the last decade.
The Indian exporters are now demanding 4 per cent subsidy under the Merchandise Exports from India Scheme (MEIS) from the Indian government in the forthcoming budget in lieu of the GSP withdrawal by US.