India-US Trade Agreement Boosts Gem and Jewellery Sector

The Gem & Jewellery Export Promotion Council (GJEPC) has enthusiastically endorsed the recently finalized trade agreement between India and the United States, recognizing it as a critical intervention for India’s gem and jewellery industry. This sector had been grappling with mounting pressure due to increasing U.S. tariffs, which had significantly hampered its export capabilities. The new agreement is expected to inject renewed confidence throughout the gem and jewellery supply chain, alleviate financial burdens for American importers, and revitalize market demand, especially for diamonds and colored gemstones. This strategic partnership is poised to foster a robust recovery and sustainable growth for the industry.

Landmark Trade Agreement Reinvigorates India's Gem and Jewellery Exports

In a pivotal development for global trade, the Gem & Jewellery Export Promotion Council (GJEPC) has expressed profound gratitude to the leadership of both India and the United States for orchestrating a landmark trade agreement. This accord is celebrated as a crucial lifeline for India's vibrant gem and jewellery sector, which had been facing unprecedented challenges due to escalating tariffs imposed by the U.S.

The agreement was lauded by the GJEPC, extending its deepest appreciation to India’s Prime Minister, Narendra Modi, the then U.S. President, Donald Trump, India’s Commerce & Industry Minister, Piyush Goyal, and the diligent negotiating teams from both nations. Their collaborative efforts were instrumental in securing this deal, which is anticipated to restore stability and confidence across the entire gem and jewellery value chain.

Historically, the United States has served as India's primary export market for gems and jewellery, constituting a substantial 31% of total exports, amounting to US$ 9.23 billion in the fiscal year 2024–25. However, the industry experienced significant turmoil in 2025 when reciprocal U.S. tariffs led to a sharp disruption in trade flows. Duties on polished diamonds and colored gemstones dramatically increased from 0% to 10% in April, further escalating to an unsustainable 50% by August. Similarly, jewellery duties soared from 5–7% to an alarming 55–57%.

This tariff hike resulted in a precipitous 44.42% decline in India’s gem and jewellery exports to the U.S. between April and December 2025, falling from US$ 8,691.25 million to US$ 3,862.08 million. Specific categories were hit particularly hard:

• Cut & Polished Diamonds: A staggering 60.11% reduction, dropping from US$ 3,636.36 million to US$ 1,450.38 million.
• Studded Gold Jewellery: A decrease of 24.54%, from US$ 2,113.46 million to US$ 1,594.83 million.
• Plain Gold Jewellery: A 28.89% fall, from US$ 258.53 million to US$ 183.84 million.

The newly ratified tariff reduction is expected to significantly lower costs for U.S. importers and provide immense relief to diamond jewellery manufacturers. This move will enhance the competitiveness of Indian diamond jewellery in its largest export market, thereby stimulating demand and stabilizing operational activities.

The GJEPC remains highly optimistic that, following the signing of this trade deal, loose diamonds and colored gemstones from India will benefit from zero-duty imports into the U.S., as outlined in Annexure 3 of the U.S. reciprocal tariff list. This provision is set to offer much-needed support for diamond exports, fostering increased trade flows, rebuilding market confidence, and delivering a powerful, sector-wide boost. The Council continues to engage in close consultations with the Government, awaiting the detailed notifications that will officially implement these transformative changes.

This historic trade agreement serves as a powerful reminder of the profound impact that international cooperation and thoughtful policy-making can have on global industries. It underscores the resilience of the gem and jewellery sector and highlights the critical role of governmental support in navigating economic challenges. For businesses and consumers alike, this pact promises a future of renewed growth, stable prices, and vibrant trade, reaffirming the enduring bond between two major economies.