US trade tensions could cause Chinese jewellery firms to move to India, says diamond financier

By

Isabelle Crossley

Published
Jul 31, 2019

The ongoing trade tensions between the US and China could cause international jewellery brands to move their manufacturing units from China to India which could boost India’s currently dwindling gem and jewellery exports, a leading diamond financier said on Tuesday.

“Some major global players in gems and jewellery are pausing to re-balance the business on account of the trade tensions,” IndusInd Bank Ltd’s CEO Romesh Sobti told Bloomberg in an interview. “The natural shift in the manufacturing business will be to India from China.”

Should Sobti’s prediction prove correct, the influx of business from China into India would be well received by India’s gem and jewellery industry which has been struggling lately. Recent Gem and Jewellery Export Promotion Council data showed that India’s gem and jewellery exports fell by 10.4% in the first quarter of the 2020 financial year compared to the same time period the year before and 16% in June alone. 

The GJEPC has petitioned the government to give more favourable tax rates for jewellery businesses in order to increase ease of doing business. “Unless there is a favourable tax regime and ease of doing business it would be challenging for the industry to move from China to India,” the GJEPC’s chairman Colin Shah told Bloomberg.