The dip in US-China trade boosted gold jewellery exports to Washington from India, which has resulted in it becoming the top shipment destination, overtaking UAE.

“The extra tariffs on Chinese jewellery exports to the US have made Indian exporters more competitive, and second, the UAE’s implementation of a 5 per cent import duty in 2017 and 5 per cent Value Added Tax (VAT) in 2018 have negatively impacted its competitiveness,” the World Gold Council said in a report.

However, it expressed the hope that the Comprehensive Economic Partnership Agreement that India has signed with the UAE would help increase shipment to the Gulf nation. 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.

Before the trade war, goods from both Hong Kong and China had long been subject to duties at the US MFN rate of 7 per cent. However, a “Section 301” list published in August 2019 subjected many Chinese consumer goods, including diamonds and jewellery, to an additional 10 per cent US tariff.

This tariff has been changed a few times but today stands at 14.5 per cent. 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.