US tariff impact: Exports of mentha oil, brass, and gems and jewellery industries flag ‘major crisis’ amid 50% duties

Trump tariffs impact: Exporters have flagged a “major crisis” for the mentha oil, brass handicrafts, and gems and jewellery industries in India, as they feel immediate impact of United States President Donald Trump's hiked tariffs on Indian imports into the US.

US tariffs of 50 per cent came into effect on August 27 — among the highest in the world — and up from previous 25 per cent imposed in April, after Donald Trump accused India of supporting Russia by buying its oil.

‘Major crisis’ for mentha oil industry in UP's Rampur

The mentha oil industry is facing a major crisis with a potential loss of several crores of rupees as the tariffs threaten the livelihoods of thousands of farmers and workers, exporters told PTI. Mentha oil is an aromatic compound used as a raw material to make a wide range of products.

Amrit Kapoor, an exporter, said orders have been put on hold or cancelled. “The cost of our products, that were priced at $20 increased to $30 overnight due to the 50 per cent duty. The buyer there doesn't understand how to get a $30 product from India. So, orders are on hold. The goods are being manufactured in the factory and we don't know when they will go,” he said.

He added that there are broader implications, particularly, for farmers and workers. “Over 10 lakh of our farmer brothers are connected to this. They will not be able to get enough money, and I think they will not even get the cost of their production back,” he said.

On employment, he warned about loss to factory workers. “If America continues this behaviour and our production decreases, it is possible that in the coming time we may have to reduce the workers at factories,” he said.

Expressing confidence in the government, Shirish Gupta, president of the Rampur chapter of the Indian Industries Federation, called the tariffs a “pressure tactic”. Adding, “The government should create schemes for the industries that are in danger due to the tariff issue so that they don't close down and people's livelihoods are not put at risk.”

He said he believed that “this is a temporary phase” and that “soon a positive result will come out”.

‘Brass City’ also feels heat of Trump tariffs

Further, exporters in Moradabad aka the ‘Brass City’ of India, are also feeling the heat. The area annually exports handicrafts worth ₹8,500-9,000 crore — of which close to 75 per cent are US-bound, while the remaining travel to the Gulf countries and Europe.

“The 50 per cent tariff imposed by the Trump administration has brought exports to a standstill. Orders worth more than ₹300 crore have already been halted and another ₹150 crore worth of business is shifting to other countries,” export firm owner Haji Iftekhar told PTI.

“This could lead to a 50 per cent fall in US-bound exports, pushing nearly two lakh people into unemployment. Several firms have already begun laying off workers,” he added.

Gems and jewellery exporters seek urgent relief

Meanwhile, the Gems and Jewellery Export Promotion Council (GJEPC) has urged the Indian government to provide immediate relief measures for the industry as their “front-loaded shipment” have been hit by unexpected penal duties, PTI reported.

“The market will be hit further if the concerns are not addressed within a quarter. A lot of demand had already been shipped to the US market before the tariff was implemented. Now the industry requires immediate extension of credit timelines from 90 days to say 180 days or more, moratorium in installment payment and interest equalisation to provide respite immediately,” GJEPC Executive Director Sabyasachi Ray told the news agency.

Front-loading is the accelerated shipment of goods to their destination before an expected disruption, such as a tariff increase, labour strike, or other regulatory change.

The US remains India's largest market for diamonds, and the fallout of the tariffs is expected to be severe on Surat, which accounts for nearly 90 per cent of the world's diamond processing and directly employs about two lakh workers. According to the GJEPC, overall gross exports of gems and jewellery witnessed an increase of 15.98 per cent to $2.17 billion in July, and overall gross imports grew 26.55 per cent to $1.8 billion.

What measures is the industry expecting?

• Among its key demands, GJEPC has sought an extension of the export obligation period under duty-free gold import schemes from 90 days to six months for exports to the US.
• Permission for SEZ units to undertake reverse job work and offload inventory into the domestic market.
• Recommended a reimbursement mechanism covering 25-50 per cent of the additional US tariffs for the August-December 2025 period
• Enhanced market access assistance for participation in global exhibitions and promotion of Indian jewellery abroad.
• Calls for deferment of interest on working capital loans, a six-month moratorium on packing credit loans related to US exports,
• Reintroduction of the interest equalisation scheme for exporters, and extension of pre-shipment finance by 90 days.
• Due to risk of job losses, urged support measures for workers, including restructuring of personal loans, education grants for girl children, and temporary coverage under the Ayushman Bharat scheme.

(With inputs from Agencies)