India's gem and jewelry sector faces a severe blow as a new 50% US tariff, effective September 3, 2025, is expected to cut exports to America by over 70%. With the US accounting for nearly one-third of India's total jewelry exports—worth US$9.23 billion in FY2024-25—this policy shift threatens over 100,000 jobs and disrupts supply chains for overseas buyers reliant on Indian polished diamonds and finished jewelry.
Tariff impact on exports
The 50% tariff, imposed in response to India's purchases of Russian oil and weapons, took effect on September 3, 2025. Shaunak Parikh, vice-chairman of the Gem and Jewellery Export Promotion Council, stated: "With the imposition of a 50 per cent tariff, we expect exports to the US to decline by more than 70 per cent. This sharp fall will cause a major dent in India’s overall gem and jewellery exports this year, with far-reaching consequences for the industry and its workforce."
Supply-chain implications
India dominates global diamond cutting and polishing, handling 90% of the world's rough diamonds. The tariff disrupts a critical supply chain where India imports raw diamonds and re-exports finished stones. For overseas buyers, this means potential delays, higher costs, and reduced availability of Indian polished diamonds and jewelry sets, especially during the peak holiday ordering season.
What buyers should watch
Importers and distributors should monitor alternative sourcing options for polished diamonds and finished jewelry, such as from China, Thailand, or Vietnam. The tariff may also accelerate demand for lab-grown diamonds, which have already gained traction amid trade tensions. Private-label brands and marketplaces relying on Indian OEM/ODM partners should prepare for price increases and longer lead times.
Broader market context
The tariff arrives at a challenging time for India's jewelry sector, which has already faced headwinds from the US-China trade war, the Ukraine conflict, and shifting consumer preferences toward cheaper lab-grown diamonds. The 70% export drop forecast could reshape global jewelry supply dynamics, particularly for bridal and diamond-set collections.
Compliance and logistics signals
Exporters and buyers must review Incoterms and customs documentation for shipments to the US. The tariff applies to all Indian-origin gem and jewelry products, including polished diamonds, gold jewelry, and silver items. Companies should consult trade compliance experts to assess duty liabilities and explore potential exemptions or phased mitigation strategies.
Source: Read the original report | Published: September 03, 2025