NEW DELHI, Feb 3
India’s gems and jewellery industry is set for a breather after US President Donald Trump announced a reduction in tariffs on Indian exports to 18% from 50%, offering immediate relief to one of the country’s most labour-intensive export sectors.
The US is India’s largest market for gems and jewellery, accounting for about 30% of industry sales, and the tariff rollback comes after nearly six months of uncertainty, shipment delays and a sharp fall in exports. Analysts and industry executives say the lower duty restores a degree of competitiveness that had been severely eroded since tariffs were doubled earlier this year, particularly for diamond exporters already grappling with weak demand for natural diamonds and the rising popularity of lab-grown alternatives in the US. Export competitiveness, jobs back in focus According to Nuvama Institutional Equities, the gems and jewellery segment was among the worst hit by the earlier tariff regime, as it “bore the maximum brunt” of the 50% duty.
The brokerage said labour-intensive sectors like gems and jewellery “clearly stand to benefit” from the rollback, adding that the move should not only support exports but also help employment generation.
The sector accounts for about 2.3% of India’s total goods exports, with annual shipments to the US estimated at around $10 billion. Diamonds alone contribute $7–8 billion of this trade, as per Moneycontrol. Edge over regional peers Jefferies noted that the reduction in tariffs gives India a pricing edge over competing exporters. At 18%, India’s tariff rate is now 1–2 percentage points lower than those faced by countries such as Pakistan and Vietnam, Jefferies said.
Gems and jewellery, classified as “precious metals, pearls, precious or semiprecious stones”, were the third-largest category of Indian exports to the US in 2024, valued at $11.6 billion.
Brokerages say this differential could help Indian exporters claw back lost orders, particularly in mass-market and mid-priced jewellery segments where price sensitivity is high. Margins, working capital under strain Before the tariff cut, exporters had flagged severe stress on margins and cash flows. Antique Stock Broking said the earlier 50% duty posed a threat to nearly $9 billion worth of exports, forcing many firms to absorb part of the tariff cost as US retailers showed limited willingness to share the burden. More broadly, 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 stand to gain from better market access and higher manufacturing-linked investment.
Exports hit hard during tariff phase
India’s gems and jewellery exports to the US fell 44.4% year-on-year to $3.86 billion during April–December 2025, compared with $6.95 billion a year earlier. In December alone, shipments plunged over 50%, reflecting the combined impact of high tariffs and subdued discretionary spending, as per Moneycontrol.
