The reduction in US tariff to 18% from 50% announced Monday brings relief to gem and jewellery exporters who count the US as their largest export market. While most exporters were diversifying operations to the EU, Middle East, Australia and New Zealand in the last few months, the sharp 44% fall in US exports in April-December of FY26 had hit most players hard.
More importantly, at 18% India now has a pricing edge over competing exporters, Jefferies said in a report on Tuesday, helping them claw their way into the US market after months of disarray following the steep hike in tariffs.
“India’s tariff rate at 18% is 1–2 percentage points lower than competing nations such as Pakistan and Vietnam. This is beneficial for Indian exporters,” Jefferies said in its report.
What did Kirit Bhansali say?
On Tuesday, Kirit Bhansali, chairman, Gems and Jewellery Export Promotion Council of India (GJEPC), said the US duty cut was a “vital measure” to revive the sector after six months of uncertainty, shipments delays and strained working capital.
“The US remains India’s largest gem and jewellery export market, accounting for 31% ($ 9.23 billion) of total exports in FY25. Reciprocal U.S. tariffs had disrupted trade flows sharply, hurting exporters. The duty cut will revive demand and stabilise operations,” he said.
Colin Shah, MD, Kama Jewelry, said that the partial relaxation would restore confidence in both domestic jewellery manufacturers & exporters as well as US buyers. Experts say that with the US trade deal happening right the trade deal with the EU, which is the second-largest export market for Indian gems and jewellery, will help in diversifying operations better at a time when geopolitical uncertainties have only grown in the last one year.
India’s gems and jewellery exports to US
Gems and jewellery, for perspective, rank as India’s third-largest export category to the US, after engineering and electronic goods, and the sector supports millions of livelihoods across the country. Industry participants had warned that sustained high tariffs would lead to job losses and hurt small and medium export units that operate on thin margins.
In a note on Tuesday, brokerage Nuvama said that labour-intensive sectors such as gems and jewellery stand to benefit from the tariff cut, adding that the move will support exports as well as help in employment generation.
Brokerage Axis Direct described the tariff reduction as “structurally positive” for India’s medium-term growth and external stability, noting that sectors with high US exposure such as gems and jewellery would gain from better market access and competitive exports.