The India–U.S. trade agreement lowering tariffs on Indian exports to 18 per cent marks a critical reset for the gems and jewellery sector, which has endured a year of disrupted shipments, compressed margins, and subdued demand. The rollback restores predictability in India’s largest export market and is expected to support a gradual recovery in diamonds, coloured gemstones, and finished jewellery over the coming months.
The India–United States trade agreement announced late last night has brought welcome relief to India’s export-led industries, particularly gems and jewellery, which has faced sustained pressure over the past year due to sharply higher tariffs and weakening global demand. The agreement lowers U.S. import tariffs on Indian goods to 18 per cent, rolling back punitive duties that had risen to as high as 50 per cent and restoring a degree of stability to bilateral trade.
For the gems and jewellery sector, which counts the United States as its largest export destination, the reset is significant. Elevated and unpredictable tariffs over the past year had disrupted shipments, reduced buyer confidence, and compressed margins across categories ranging from loose diamonds to finished gold and studded jewellery. Industry estimates indicate that diamond exports fell by nearly 60 per cent, while overall gems and jewellery exports declined by close to 40 per cent between April and December last year.
Sabyasachi Ray, Executive Director, Gem and Jewellery Export Promotion Council, said the agreement directly addresses these challenges. “We are very thankful to our Honourable Prime Minister Narendra Modi, U.S. President Donald Trump, and our Minister of Commerce and Industry, Mr Piyush Goyal, for pulling off this herculean deal. Our industry has been under severe pressure, and this development should help us recover a significant part of the losses,” he said.
Ray pointed out that Annexure 2 of the agreement specifically addresses tariff treatment for gems and jewellery, a sector where even marginal duty changes have a material impact.
“By resetting duties to a lower and more stable level, the agreement restores earlier trade terms and removes the cost uncertainty that had crept into U.S.–India jewellery trade,” he added.
Annexure 2 of the India–U.S. trade deal specifically addresses tariff treatment for gems and jewellery, a sector that is both high value and highly sensitive to even marginal duty changes. Over the past year, elevated reciprocal tariffs had made Indian exports to the U.S. more expensive and unpredictable, affecting everything from loose diamonds to finished gold and studded jewellery. Annexure 2 resets these duties to a lower, more stable level, effectively restoring earlier trade terms and removing the cost uncertainty that had crept into U.S.–India jewellery flows. By doing so, it serves not as a policy overhaul, but as a corrective measure aimed at stabilising trade, rebuilding buyer confidence, and keeping India competitive in its most important export market.
Sabyasachi Ray, Executive Director, GJEPC
Export Volumes Expected to Improve
Industry leaders expect the tariff reduction to support higher export volumes over the coming months, particularly in diamonds and coloured gemstones.
Alkesh Shah, Vice Chairperson, Gold Star, said the U.S. market remains critical for Indian exporters. “The U.S. was, and will always remain, a priority market for Indian jewellery exports. With the tariff reduction, diamonds and coloured gemstones are expected to benefit the most, and this should translate into higher export volumes over the next six to twelve months,” he said.
The U.S. was, and will always remain, a priority market for Indian jewellery exports. With the tariff reduction, diamonds and coloured gemstones are expected to benefit the most, and I do expect this to translate into higher export volumes over the next six to twelve months. What Indian exporters need to do now is continue what they were doing in the pre-tariff era and build on that momentum
Alkesh Shah, Gold Star, Vice Chair Person
Dinesh Lakhani, Director, Kiran Gems, also welcomed the move. “We are very grateful for the reduction of tariffs from 50 per cent to 18 per cent. This will definitely increase exports and be beneficial to the Indian gem and jewellery industry,” he said. Mr. Lakhani added that he hopes future negotiations will address duties on loose diamonds, which are treated as raw material in many global markets.
We are grateful for the reduction in tariffs from 50% to 18%. This move will certainly support higher export volumes and be beneficial for the Indian gem and jewellery industry. Since loose diamonds are a raw material—and several countries already levy a zero percent tariff on them—we remain hopeful that similar treatment may be considered in the future.
Dinesh Lakhani, Director, Kiran Gems
Looking Beyond a Single Market
While the agreement provides immediate relief, industry bodies are emphasising the need for continued market diversification. Arvind Gupta, President, Sitapura, Gems and Jewellery Association, said exporters are increasingly aware of this requirement.
“The reduction to 18 per cent is positive, but it remains relatively high for products such as diamonds and finished jewellery. A potential EU Free Trade Agreement could play an important role in strengthening India’s export momentum,” he said.
Mr. Gupta added that further tariff concessions under a future India–U.S. FTA would be critical for sustained growth and that Indian exporters would need to continue investing in marketing and market development.
Overall, the trade agreement is being viewed as a stabilising intervention rather than a structural shift. For an industry dependent on scale, long production cycles, and overseas buyer confidence, the restoration of predictability in its most important export market is expected to support recovery in the near term.
The reduction of tariffs to 18 per cent is a positive development for Indian jewellery exports, but exporters have also realised the importance of building alternative markets. In this context, a potential EU Free Trade Agreement (FTA) could play a significant role in strengthening India’s export momentum. At the same time, the Indian gem and jewellery industry continues to seek further tariff concessions under a possible India–U.S. FTA to meaningfully boost exports.
Arvind Gupta, President, Sitapura, Gems and Jewellery Association