US tariff reset fuels comeback hopes for India's lab-grown diamond industry
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India’s diamond and jewellery exporters are looking at a reset after a bruising year, with the proposed tariff relief under the India–US trade framework expected to reverse sharp export declines and restore competitiveness in the world’s largest consumer market.
Gem & Jewellery Export Promotion Council (GJEPC) chairman Kirit Bhansali said the sector had “taken a severe hit” over the past year. “Under the announced framework, duties have been reduced to 18% on jewellery, which itself provides meaningful relief to exporters,” he said. “We are confident that, upon conclusion of the Interim Agreement, diamonds and coloured gemstones will receive full zero-duty treatment as envisaged.”
Moreover, he added that the council has urged the government to seek inclusion of lab-grown diamonds and synthetic gemstones under the US tariff exemption list.
The damage over the past year has been severe. Between April and December 2025, India’s lab-grown diamond (LGD) exports to the US fell 51% to $245 million from $500 million a year earlier, while cut and polished diamond exports to the US plunged over 60% to $1.45 billion from $3.64 billion. Overall gem and jewellery exports to the US declined 44% to $3.86 billion in the nine-month period, down from $6.95 billion in April–December 2024, as steep tariff hikes choked demand.
The pain followed a sharp escalation in duties. By August, tariffs on polished diamonds and coloured gemstones had surged from zero to 50%, severely eroding price competitiveness. This was particularly damaging given the US accounts for 35% of India’s polished diamond exports and nearly 40% of its lab-grown diamond shipments. The US is also the world’s largest LGD market, with an estimated 60% share of global demand.
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“Lab-grown diamond exports to the United States were significantly impacted by the 50% tariff, with India’s LGD exports falling 51% to $245 million during April–December 2025, from $500 million in the same period last year,” the GJEPC said in a statement.
However, the India–US trade deal and tariff reduction will restore competitiveness and create a level playing field, “paving the way for demand revival, renewed buyer confidence and recovery of lost ground.”
Under the announced framework, tariffs on jewellery have been reduced to 18% from as high as 25% earlier, offering immediate relief. Industry estimates suggest that a tariff reset at this level could help Indian exporters regain ground against rivals such as China, Vietnam and Thailand. Jewellery exports to the US could rise 10–15% within 12–18 months, while US imports from India, which fell sharply in 2026, are expected to stabilise and recover.
What it means for LGDs
The gains are expected to ripple across the value chain, benefiting diamond cutters, jewellery manufacturers, gemstone assemblers and luxury exporters. Lower tariffs could also accelerate LGD jewellery imports from India, drive higher demand for certification services and revive shipments of loose stones.
India exported over $2 billion worth of lab-grown diamonds globally in 2024, and the industry estimates that improved access to the US market alone could lift LGD shipments by another 8–12%.
Industry players see the agreement as a turning point. “With tariffs on key exports reduced significantly, we expect renewed competitiveness and improved market access for both natural and lab-grown diamonds after a period of severe contraction,” said Prapanjj S K Kota, founder of Reia Diamonds. He said the tariff reset would help restore order flows, ease working capital pressures and allow Indian manufacturers to re-engage with the world’s largest consumer market as demand shifts toward more transparent and sustainable products.
However, Shweta Harit, CEO of Forevermark believes it is early days for LGDs in India. "The talk is more than the actual business. But India is an 'and' market; they have [space for] every type of jewellery."
Although, Harit flagged concerns around resale and exchange value as a key friction point. “Some brands are now not even doing exchange on lab grown because they are realising that when they go back, they are not getting the same price,” she added.
It is only with time, as the deal progresses, that the real allure of LGDs will be known.