Editor’s Note
This article highlights the Indian gem and jewellery sector’s positive reception of a new trade agreement with the US, which is seen as crucial relief following significant tariff increases and trade disruptions.
The Gem & Jewellery Export Promotion Council (GJEPC) said the India-US trade agreement offers “vital relief” to the sector, arguing that the deal could help revive exports battered by steep American tariffs and months of disrupted trade flows.
The industry body welcomed the move for a sector that had come under intense pressure after the US sharply raised duties on diamonds, gemstones and jewellery last year.
The trade pact, announced on February 2 by Prime Minister Narendra Modi and US President Donald Trump, caps reciprocal tariffs on Indian goods at 18%, replacing punitive levies that had climbed as high as 50% during the course of negotiations. The agreement comes at a critical moment for the industry, which counts the US as its single largest export destination.
The U.S. remains India’s biggest market for gem and jewellery exports, accounting for 31% of total shipments, or about $9.23 billion, in FY2024-25, GJEPC said in a statement. It thanked Prime Minister Modi, President Trump, Commerce and Industry Minister Piyush Goyal and negotiators from both sides for securing the deal.
The sector had been hit hard by the tariff escalation that began in April 2025, when duties on polished diamonds and coloured gemstones were raised from zero to 10%, before jumping to an unviable 50% by August. Import duties on jewellery surged from 5–7% to as much as 55–57%, severely straining exporters’ margins, liquidity and working capital.
The impact was swift and severe. India’s gem and jewellery exports to the US plunged 44.4% between April and December 2025, according to data from GJEPC, falling to $3.86 billion from $8.69 billion a year earlier. Cut and polished diamond exports slumped more than 60%, while shipments of studded gold jewellery declined 24.5% and plain gold jewellery fell nearly 29%, GJEPC data showed.
Industry executives say the tariff reduction under the new deal will immediately lower costs for US importers and restore competitiveness for Indian exporters in their most important overseas market.
GJEPC also expressed optimism that loose diamonds and coloured gemstones from India could benefit from zero-duty access to the US under Annexure 3 of the American reciprocal tariff list, a move that would further boost exports and improve trade flows.
The council said it is in close consultation with the government and is awaiting detailed notifications on the implementation of the agreement. If executed as outlined, industry players believe the deal could mark a turning point after a bruising year, helping the sector regain lost ground and rebuild momentum in the US market.