【India】EU Abolishes Tariffs on Indian Jewelry to Boost Bilateral Trade

The European Union and India have sealed a historic free trade agreement that eliminates the 2% to 4% duties on finished jewelry. This measure aims to double trade in the sector to reach $9.9 billion over the next three years. The European Union and India signed a strategic free trade agreement on January 27, 2026, which eliminates tariffs on jewelry imported from the Asian country. The pact seeks to mitigate the decline in exports to other markets and strengthen the economic axis between the two blocs through near-total tariff liberalization.

After nearly two decades of complex negotiations, the treaty establishes an unprecedented framework of openness. The EU will liberalize 99.5% of its tariff lines for goods from India within seven years. In turn, the Asian giant will reduce tariffs on 96.6% of imports of European origin, promoting a two-way flow of goods.

The gems and jewelry sector is the major beneficiary of this alliance. Until now, finished Indian jewelry faced tariffs of between 2% and 4%, which will disappear completely once parliamentary ratification is completed. This strategic move responds to the Indian industry’s need to diversify its destinations, especially after a severe 44% drop in its exports to the U.S. was recorded in 2026.

The figures support the magnitude of this decision. In 2024, India’s jewelry exports to the European bloc totaled $2.7 billion. Under the new regulatory framework, forecasts indicate that bilateral trade in this segment will double, reaching $9.9 billion (approximately 910 billion rupees) within a three-year horizon.

Kirit Bhansali, Chairman of India’s Gem & Jewellery Export Promotion Council (GJEPC), highlighted the relevance of this preferential access.

Similarly, Sabyasachi Ray, Chief Executive Officer of the GJEPC, confirmed that the effective elimination of tariffs is subject to the final approval of the agreement by the parliamentary bodies of both territories. The agreement covers everything from simple jewelry to pieces with precious stones, leveraging India’s renown in design to consolidate its presence in the Community market.

What types of jewelry products will benefit?
The agreement includes the elimination of tariffs for precious jewelry (both simple and with stones), silver articles, and imitation pieces manufactured in India.

What is the trade growth objective with this pact?
Bilateral trade in gems and jewelry is expected to increase from current levels to $9.9 billion within three years, offsetting weakness in other international markets.

When will the full tariff elimination take effect?
Although the announcement was made on January 27, 2026, the removal of the 2-4% tariffs will become effective after parliamentary approval and formal ratification by both parties.