India-US trade deal: Gems and jewellery exports set to shine once again

Easing of US tariffs has revived demand-side confidence in India's gems and jewellery sector, raising hopes of reversing export losses and regaining momentum

The easing of tariffs imposed by the United States (US) on Monday on Indian exports has revived demand-side confidence in the gems and jewellery sector, raising hopes of reversing losses incurred in the last 10 months and regaining momentum.

 

Reciprocal tariffs imposed on the sector last year, including diamonds, disrupted trade flows between the two countries. The US is the largest market for the precious stone, with a share of more than 30 per cent. 

 

The sector saw a 44.5 per cent drop in exports to the US between April and December 2025, with cut and polished diamonds, studded gold jewellery, and plain gold jewellery among the hardest hit. 

“The Gem and Jewellery Export Promotion Council (GJEPC) is optimistic that based on India signing the trade deal, loose diamonds and coloured gemstones from India will get the benefit of zero duty imports in the US, vide Annexure 3 of the US reciprocal tariff list, providing much-needed support for diamond exports. This will enhance trade flows, rebuild confidence, and deliver a strong sector-wide boost,” the GJEPC said in a statement. 

 

Data from the GJEPC shows that exports of cut and polished diamonds contracted 60.11 per cent from $3.63 billion in 2024 to $1.45 billion in 2025. Studded gold jewellery contracted 24.54 per cent to $ 1.6 billion in 2025, while plain gold jewellery declined 28.89 per cent to $ 183.84 million. 

 

“After the tariffs and additional tariffs came into effect last year, the sector saw a contraction of demand of as much as 45 per cent. Now, with the new structure, the industry is hoping that demand will bounce back. The US remains the largest market for us,” said Dinesh Navadia, chairman of the Indian Diamond Institute.

 

He added that the sector would continue to look for newer markets such as the United Arab Emirates (UAE), with a focus on lab grown diamonds. 

 

A unit operator said finer details were yet to be clarified, adding that weaker diamond demand has meant a smaller workforce for now, although this could change once there is greater clarity and fresh orders begin to come in.

 

For about 10 months now, the diamond industry in Surat has been grappling with low demand for natural, cut and polished diamonds leading to uncertainty over the future of more than 800,000 skilled workers. Unit managers had previously estimated that a prolonged market downturn, coupled with looming tariffs, could threaten the livelihoods of over 400,000 artisans. 

 

“Tariff cuts lower costs for US importers, provides immense relief to diamond jewellery manufacturers, boost competitiveness of Indian diamond jewellery, revive demand, and stabilise operations,” Kirit Bhansali, chairman, GJEPC, said.

 

In April, the Donald Trump administration imposed sweeping reciprocal tariffs on India, levying a 26 per cent duty on the export of gems and jewellery. Adding to the blow, the US piled on another slab of tariff, driving the effective tariff on gems and jewellery to 55 per cent in August.