The India–US Interim Trade Agreement framework has introduced major tariff changes for gems and jewellery exports, offering relief to Indian exporters after a year of elevated duties and declining demand in the US market.
Previously, Indian jewellery exports to the United States faced a combined duty burden of around 31%, including reciprocal tariffs and standard MFN duties. Cut and polished natural diamonds and lab-grown diamonds were subject to reciprocal tariffs of up to 25%, reducing India’s competitiveness in its largest export destination.
Under the new framework, reciprocal tariffs on jewellery have been reduced to 18%, bringing the total duty burden to roughly 24%. The biggest shift is for cut and polished natural diamonds, included under Annex III with full duty exemption, effectively making natural diamonds zero-duty exports to the US once implemented.
Lab-grown diamonds are not included under Annex III and will continue to attract an 18% reciprocal tariff, though the industry is seeking their inclusion in future negotiations.
The tariff reset is part of a broader bilateral trade framework that also covers sectors such as pharmaceuticals, smartphones, and agriculture, with several Indian exports set to receive zero-duty treatment in the US market.
The move comes at a critical time for the gem and jewellery sector, which has seen a sharp slowdown in exports due to tariff pressures and weak global demand. Industry stakeholders expect the new tariff structure to improve price competitiveness, revive export volumes, and strengthen India’s role in global diamond processing and jewellery manufacturing.
While the framework is an interim step and not a full trade agreement, it signals a shift toward deeper trade liberalisation between India and the United States and could pave the way for further tariff reductions in the future.