Gems and jewellery units across India breathed a sigh of relief upon the announcement of the India-US framework for an Interim Agreement within the broader US-India Bilateral Trade Agreement (BTA).
The announced framework reduces the tariff on Indian jewellery and precious stones to 18% from 50% and is expected to receive zero-duty treatment upon the signing of the agreement. For the gems and jewellery sector, this is long-overdue relief.
Alkesh Shah, Vice Chairperson of Goldstar Jewellery, hailed the decision as a positive step for the sector, stating, “This will boost segments such as loose diamonds and gemstones, which were pressured under high US tariffs. Once the agreement is signed, the industry is confident that diamond exports will bounce back right away.”
Reversing the 60% Slump
India’s diamond sector was severely impacted during the US’s 50% reciprocal tariff policy, with cut-and-polished diamond (CPD) exports declining by over 60%, from USD 3.64 billion in April–December 2024 to USD 1.45 billion in April–December 2025.
Dinesh Lakhani, Group Director at Kiran Gems, said in a conversation with FE, “India’s exports of loose diamonds to the US had virtually ceased during the 50% tariff period. As we process over 90% of the world’s diamonds and the US is yet our biggest market, this agreement will also boost employment in the sector and resume our CPD exports to the US.”
Industry players will now be paying an 18% tariff rate, which, coupled with the pre-existing 6% duty, equals to 24%, a far lower amount than the previous 56% overall tariff.
Levelling the Playing Field
According to Adil Kotwal, President of SEEPZ Gems & Jewellery Manufacturers Association (SGJMA), the new 24% rate will level the playing field for India, saying, “Our competitiveness in the global landscape will increase with countries such as Thailand, Vietnam and Hong Kong. The US is India’s biggest market for gems and jewellery, accounting for nearly 30% of our overall revenue. While this will not change, India’s free-trade agreements (FTAs) and partnerships with countries such as Australia, the UAE, and the UK will not only increase employment in the sector but also facilitate growth and competitiveness.
In a statement to the media, Kirit Bhansali, Chairman of the Gems & Jewellery Export Promotion Council (GJEPC), stated, “The Indian gem and jewellery industry is elated by the Interim Agreement framework announcing zero-duty access for diamonds and coloured gemstones to the US. Under the framework, jewellery duties have been reduced to 18%, providing immediate relief, and we expect full zero-duty treatment for diamonds and coloured gemstones once the agreement is concluded, which will help revive exports and restore competitiveness.”