New US Tariff Regime Keeps Pressure on India’s Gem and Jewellery Exports

SURAT :  India’s gem and jewellery industry continues to face mounting pressure in the crucial US market after Washington retained the 10% additional tariff on Indian exports under its new Section 301 tariff regime. While India has secured a competitive edge over several rival manufacturing hubs, the industry says the tariff continues to hurt exports and weaken the country’s position in the global diamond trade.

The new tariff framework, which came into effect on July 24, replaces the temporary Section 122 balance-of-payments surcharge following investigations by the Office of the United States Trade Representative (USTR) into the enforcement of bans on imports produced with forced labour.

The Gem & Jewellery Export Promotion Council (GJEPC) welcomed India’s placement in the lower 10% tariff band, compared with the 12.5% tariff imposed on competitors such as China, Hong Kong, Thailand, Türkiye, the UAE, Israel and Vietnam.

“India’s gem and jewellery industry has always followed responsible sourcing, ethical business practices and high labour standards. We reject any suggestion linking the sector with forced labour,” said Kirit Bhansali, Chairman of GJEPC.

He welcomed the Government of India’s amendment to the Foreign Trade Policy prohibiting the import of goods produced through forced labour, saying it reinforces India’s commitment to global labour standards.

However, Bhansali stressed that the continued 10% US tariff remains unjustified and poses a serious challenge for exporters. “While India’s lower tariff band offers some competitive advantage, we need an early India-US Bilateral Trade Agreement and tariff relief for natural diamonds and coloured gemstones to bridge the remaining gap,” he said.

The industry also highlighted that natural diamonds traded through Belgium continue to enjoy zero additional US tariff, while Indian-origin diamonds attract a 10% duty, creating a major disadvantage. Jewellery exports from India now face an effective US import duty of 15.5% to 16%, including the existing Most Favoured Nation (MFN) duty, while lab-grown diamonds and synthetic stones also remain subject to the additional tariff.

GJEPC said it will continue working with the Government of India to secure tariff relief and strengthen the global competitiveness of India’s gem and jewellery exports.