The US administration, under Donald Trump, has been pushing for a more balanced trade relationship, aiming to reduce disparities in import duties between the two nations. Currently, India's tariffs on US imports average 12%, while US duties on Indian imports stand at just 2.2%, according to World Trade Organization data. There are growing concerns that the US may match India’s 12% tariff rate, potentially as early as April 2.
This shift could have serious consequences for India’s gem and jewellery exports, which accounted for over $11.58 billion last year—more than 30% of total exports in the sector—according to the International Trade Commission.
India currently imposes a 5% duty on imported polished diamonds and 20% on gold, silver, and platinum jewellery. In contrast, the US does not levy duties on loose diamonds from India, and gold jewellery imports are taxed at 5.5% to 7%. A tariff hike from the US could lead to job losses and business closures, exacerbating existing pressures from weak global demand, declining prices, and competition from lab-grown diamonds.
Industry leaders are calling for urgent intervention. Adil Kotwal, president of the SEEPZ Gems & Jewellery Manufacturers' Association (SGJMA), warned that a sudden increase in tariffs could endanger thousands of livelihoods, urging the Indian government to negotiate for a fairer duty structure or lower its own import tariffs on US jewellery.
Similarly, Kirit Bhansali, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), highlighted the severe impact such a policy could have on studded gold jewellery and cut and polished diamonds. The council has engaged with US trade counterparts to lobby against the tariff increase, emphasizing that many American retailers and jobs depend on a steady supply from India.
With the potential for new tariffs looming, the industry is on edge, hoping for diplomatic intervention to prevent further disruptions to this vital export sector.