India–US trade deal brings relief to gems and jewellery exports after tariff shock
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India’s gem and jewellery sector is set for a rebound after the landmark India–US trade agreement offered relief from steep reciprocal tariffs that had sharply disrupted exports to the country’s largest market, industry body GJEPC said today.
The United States accounts for 31% of India’s total gem and jewellery exports, valued at $9.23 billion in FY2024–25. But a sudden escalation in US tariffs through 2025 severely dented shipments, squeezing margins and straining working capital across the value chain.
Calling the deal a “vital relief measure”, Kirit Bhansali, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), said the agreement would help restore competitiveness and revive demand in a market critical to the sector’s survival.
“The US-India trade deal offers vital relief to India's gem and jewellery sector amid U.S. tariff pressures,” Bhansali said. “Tariff cuts lower costs for US importers, provide immense relief to diamond jewellery manufacturers, boost competitiveness of Indian diamond jewellery, revive demand, and stabilise operations.”
Exports hit hard by tariff escalation
The pressure intensified in 2025 after the US imposed reciprocal tariffs on Indian exports. Duties on cut and polished diamonds and coloured gemstones rose from zero to 10% in April and were further raised to 50% by August. For finished jewellery, tariffs jumped from 5–7% to as high as 55–57%, making exports commercially unviable.
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The impact was swift. India’s gem and jewellery exports to the US plunged 44.42% between April and December 2025, falling from $8.69 billion to $3.86 billion.
Key segments were hit sharply. Exports of cut and polished diamonds declined 60.11% to $1.45 billion from $3.64 billion. Studded gold jewellery exports fell 24.54% to $1.59 billion, while plain gold jewellery shipments dropped 28.89% to $183.84 million.
“These duties strained liquidity, working capital and margins across the sector,” GJEPC said, noting that trade flows were “disrupted sharply” during the period.
Zero-duty hopes for diamonds
Industry optimism now hinges on tariff rollbacks under the new trade framework. GJEPC expects loose diamonds and coloured gemstones from India to qualify for zero-duty imports into the US under Annexure 3 of the US reciprocal tariff list.
“Based on India signing the trade deal, loose diamonds and coloured gemstones from India will get the benefit of zero-duty imports in the USA,” Bhansali said. “This will enhance trade flows, rebuild confidence, and deliver a strong sector-wide boost.”
The council said it is continuing consultations with the government and is awaiting detailed notifications on implementation, even as exporters prepare for a gradual recovery in orders and operations.