US to lift reciprocal tariff on Indian gems, diamonds
What's the story
The US has announced its intention to lift the reciprocal tariff on gems and diamonds from India, pending the successful conclusion of an interim trade agreement. The move comes as a major relief for India's gems and jewelry sector, which heavily relies on the US market. The country accounts for nearly 30% of total sales in this industry.
Tariff details
US to cut reciprocal tariffs on Indian exports
The US has also promised to cut reciprocal tariffs on Indian exports from the current 50% to 18%. This is part of a broader commitment under the Potential Tariff Adjustments for Aligned Partners Annex to Executive Order 14346. The statement includes a range of goods such as generic pharmaceuticals, aircraft parts, and notably gems and diamonds.
Export decline
India's gem and jewelry exports to US
India's gem and jewelry exports to the US have witnessed a sharp decline in recent years. Between April-December 2025, exports fell by 44% year-on-year (YoY) to $3.86 billion from $6.95 billion during the same period last year. The decline was particularly steep in December 2025 when exports halved due to high tariffs imposed by the US government on Indian gems and jewelry products.
Export statistics
Decline in diamond exports to the US
India, the world's largest exporter of cut and polished diamonds, has seen a decline in diamond exports to the US. From $5.93 billion in 2023, exports fell to $4.88 billion in 2024 and further declined to just $2.42 billion by September last year. Colin Shah, MD of Kama Jewelry, welcomed the announcement of zero tariff on gems and diamonds as a major boost for India's gem and jewelry sector.
Sector revival
Waiver expected to revive India's gem and jewelry sector
The waiver of tariffs is expected to revive India's gem and jewelry exports, which have been hit hard by trade tariffs. Shah said that the move will help restore business activity in this sector. India processes over 90% of the world's cut and polished diamonds by volume and exports a variety of products including lab-grown synthetic diamonds, colored gemstones, plain and studded gold/silver/platinum jewelry among others.
Sector response
GJEPC welcomes US's decision
The Gem & Jewelry Export Promotion Council (GJEPC) welcomed the US's decision to review and advance gems and jewelry exports. The council emphasized its importance for MSME growth and employment opportunities in India. Ranjeet Mehta, CEO of PHD Chamber of Commerce and Industry, said that this deal is expected to support exports from India's cutting and polishing industry while improving margins as well as export volumes.