A recent decision by the US Court of International Trade has paused a looming tariff hike that threatened to significantly impact Indian gem and jewellery exporters.
The ruling comes as a critical, if temporary, relief for the sector, which had been bracing for a sharp increase in export duties.
The tariffs—originally introduced through executive orders under former President Donald Trump—proposed raising import duties from 6% to as high as 26% on jewellery and other goods from countries with trade surpluses, including India. The court declared the April 2 executive orders “unlawful,” effectively halting their implementation, at least for now.
The 26% tariff on Indian jewellery exports was set to go into effect on April 9 but had been postponed to July 9 due to ongoing legal challenges. Had the new duties gone forward, the impact would have been severe. Exporters operating out of Mumbai’s SEEPZ zone, for example—who send roughly 64% of their $3.5 billion in annual exports to the US—faced the possibility of upfront duty costs rising from $60,000 to $320,000 per million-dollar shipment.
Industry insiders feared that such a cost increase would have placed enormous strain on liquidity at a time when global demand is already soft. For many businesses, particularly small and mid-sized exporters, these duties would have eroded margins and disrupted long-standing supply chains.
While the court ruling does not eliminate future trade tensions or the possibility of new tariff proposals, it gives the industry some breathing room. The episode also highlights the broader need for predictable trade policies, especially for sectors like gems and jewellery where India plays a leading global role.