The reciprocal tariffs announced by the United States are poised to disrupt India’s $32 billion gems and jewellery export market, with American imports accounting for $11.58 billion, or 34% of India’s total sectoral exports. The increased tariffs, which include a potential 20% duty on loose diamonds and 5.5-7% on gold jewellery, are expected to erode India’s competitive advantage in the U.S. market. Industry experts warn that this could lead to supply chain disruptions, job losses, and increased pressure on small and medium enterprises (SMEs) engaged in jewellery manufacturing.
With the U.S. being India’s largest jewellery export destination, these tariffs could significantly impact Indian manufacturers and exporters, forcing them to explore alternative trade routes or shift production offshore to remain competitive.
The U.S. accounts for $11.58 billion of India’s $32 billion gems and jewellery exports.
Tariffs could rise to 20% on loose diamonds and 5.5-7% on gold jewellery.
India risks losing market share to competitors like Thailand, Vietnam, and Korea.
SMEs and skilled artisans in the sector may face significant business strain.
India’s Gems & Jewellery Industry at Risk from U.S. Tariffs
India’s gems and jewellery sector has long held a dominant position in global trade, with exports reaching $32.85 billion in FY 2023-24. The U.S. remains the most significant buyer, accounting for nearly one-third of India’s exports in this category. However, the newly imposed U.S. tariffs threaten to upend this balance by making Indian jewellery products more expensive in the American market.
According to Colin Shah, Managing Director of Kama Jewellery, the new tariffs could deal a severe blow to Indian exporters, who currently enjoy zero duty on loose diamonds and lower tariffs on gold jewellery. “With import duties now set to rise to 20% on diamonds and 5.5-7% on gold jewellery, India’s competitive edge is at risk,” he warned.
The U.S. accounts for over 30% of India’s jewellery exports.
India’s export portfolio includes cut and polished diamonds, studded gold jewellery, lab-grown diamonds, and silver jewellery.
The rise in import duties could lead to declining orders from American buyers.
Exporters may need to adjust pricing strategies to remain competitive.
Industry Leaders Sound Alarm Over Competitive Pressures
The imposition of higher U.S. tariffs will impact India’s position in the global gems and jewellery trade, forcing businesses to reassess their strategies. Experts caution that competing nations such as Thailand, Vietnam, and South Korea, which benefit from lower tariff structures, may capture market share at India’s expense.
“Tariffs are more than economic measures; they redefine the dynamics of trade partnerships,” said Rajesh Rokde, Chairman of the All India Gem and Jewellery Domestic Council (GJC). “The gems and jewellery sector, with its reliance on delicate global collaborations, faces challenges that call for strategic foresight.”
Moreover, the industry is heavily dependent on skilled artisans and micro, small, and medium enterprises (MSMEs), which could struggle with reduced orders from U.S. buyers. Supply chain disruptions could force Indian jewellery manufacturers to explore alternative production hubs outside India or seek trade pacts to offset the impact of tariffs.
Thailand, Vietnam, and Korea may gain U.S. market share at India’s expense.
Indian manufacturers could face supply chain disruptions due to tariff hikes.
The industry relies on MSMEs, which may struggle to adapt to the new trade dynamics.
Exporters may need to diversify markets to reduce dependency on the U.S.
Gems & Jewellery: A Key Driver of India-U.S. Trade
Gems and jewellery rank as India’s third-largest export category to the U.S., after engineering goods and electronic items. The sector plays a vital role in India’s economy, employing millions and generating substantial foreign exchange.
According to data from the U.S. International Trade Commission (USITC), India supplied 12.99% of America’s total gem and jewellery imports in 2024, valued at $11.58 billion. Given the scale of trade, the impact of new tariffs could be severe unless India negotiates trade relief measures with the U.S.
Industry stakeholders believe that a bilateral trade agreement (BTA) between India and the U.S. could provide some relief. By securing lower duties for jewellery exports, India could mitigate the impact of rising costs and retain its competitive advantage.
Gems and jewellery are India’s third-largest export category to the U.S.
The sector is a major employer, supporting millions of workers.
India accounts for 12.99% of total U.S. gems and jewellery imports.
A trade agreement with the U.S. could help mitigate tariff-related challenges.
Domestic Market Impact: Limited Disruptions Expected
While the export market faces turbulence, India’s domestic jewellery sector is unlikely to experience major disruptions. The country does not import significant quantities of gold or jewellery from the U.S., meaning that local businesses catering to the Indian market will remain largely unaffected by the tariff hikes.
“As far as domestic consumption of gold is concerned, neither is India an importer of gold nor jewellery from the U.S.,” said Saurabh Gadgil, Chairman and Managing Director of PNG Jewellers. “So, as far as PNG Jewellers’ business is concerned, we won’t face any impact.”
India’s domestic gold and jewellery market will remain unaffected.
Local jewellers who cater to the Indian market do not depend on U.S. imports.
Exporters, however, must find ways to absorb or mitigate tariff costs.
Strategic diversification of markets may help cushion the impact of U.S. duties.
The Road Ahead for India’s Jewellery Industry
With the U.S. imposing steeper tariffs, Indian jewellery exporters will need to reassess their strategies to maintain global competitiveness. Some experts suggest that diversifying exports to other major markets, such as the United Arab Emirates, Europe, and Southeast Asia, could help mitigate dependence on the U.S.
Additionally, negotiating a trade agreement with the U.S. to lower tariffs on Indian gems and jewellery products could provide a much-needed reprieve. Until such measures are in place, Indian exporters will likely face pricing pressures, declining market share, and increased operational costs.
Indian jewellery exporters must explore alternative global markets.
Negotiating a trade agreement with the U.S. could provide tariff relief.
Price pressures may force exporters to adjust business strategies.
The industry must focus on cost efficiency and innovation to remain competitive.
