Gem and jewellery players see significant export potential in the European Union (EU) with duties slashed on jewellery products as part of the trade deal with the 27-member block. India signed the free-trade agreement (FTA) with the EU on Tuesday, reducing duties on gems and jewellery to zero.
They stood at around 2.5% to 4% earlier. While the duty rates may seem small, it is important to note here that gems and jewellery are high-value items. Even a 2% duty has a significant impact on the sector.
A zero duty therefore is significant and comes at a time when gem and jewellery exports to the US market, its largest market, have declined by 44% following a 50% tariffs on Indian goods since August 2025, experts said.
India’s gem and jewellery exports to the EU
In contrast, India’s gem and jewellery exports to the EU, which stood at $2.7 billion, could jump significantly with the duty cut, Gems and Jewellery Export Promotion Council (GJEPC) said. A report by Jefferies says that gems and jewellery exports to EU accounted for 3% of India’s overall exports to the European Union between January to November 2025.
GJEPC says that bilateral trade with the EU in gems and jewellery could double in three years to $10 billion from $5.2 billion now. Imports account for $2.5 billion worth of trade at the moment.
“Zero-duty access to the EU market empowers export hubs in Gujarat, Rajasthan, Maharashtra and West Bengal to increase shipments of precious jewellery (plain and studded), silver and imitation jewellery. This will help Indian exporters salvage lost ground amid the decline in US exports,”Kirit Bhansali, chairman, GJEPC, said.
What do experts say?
Experts say that Indian exporters can now move beyond raw material supplies to scale up volumes in higher-value jewellery categories, strengthening India’s position there.
“While tariff reductions provide a competitive advantage to both economies in multiple sectors including gems and jewellery, it also offers an opportunity to address non-tariff barriers through regulatory alignment,” Gulzar Didwania, partner, Deloitte India, said.
Lower landed costs can also expand EU demand across plain gold and studded categories, while encouraging deeper relationships with European wholesalers and brands.
Since the sector is MSME-heavy and artisan-supported, the impact on employment is significant, with gains likely in cutting, polishing, setting, and finishing.
For perspective, gems and jewellery exports to EU are currently dominated by cut and polished diamonds (valued at US$ 1.72 billion), followed by gold jewellery (US$ 453 million) and silver jewellery (US$ 85 million).
Bhansali argues that India’s share in jewellery exports to the EU can move up with the free-trade deal as Indian brands look to tap the EU market aggressively.
The 27 member states of the EU currently import $11.37 billion worth of gold jewellery annually from the global market. Of this, imports from India stand at just $468 million, representing a market share of just 4.11%.
In the case of silver jewellery, of the $2.47 billion global import market in the EU, India’s share is only $104 million (or 4.2%). Similarly, India holds a meagre 2% share of the EU’s $2.7 billion import market for imitation jewellery.