Exports to the United States fell sharply during April-December 2025, totalling $3.86 billion, a decline of 44.42% year-on-year, compared to $6.95 billion in the corresponding period the previous year
New Delhi: The United States has agreed to reduce reciprocal tariffs on Indian goods to 18% from 25% as part of a larger trade deal, easing trade tensions between India and the United States, and bringing significant relief to India’s gems and jewellery sector, for which the US remains the single largest export destination.
The deal was announced by US President Donald Trump in a post on “Truth Social”: “Out of friendship and respect for Prime Minister (Narendra) Modi and as per his request, effective immediately, we agreed to a trade deal between US and India whereby US will charge a reduced reciprocal tariff, lowering it from 25% to 18%.”
Accounting for nearly 30% of the industry’s overseas sales, the American market plays a critical role in sustaining export volumes, employment and manufacturing activity across India’s jewellery value chain.Under the latest trade understanding, tariffs on Indian exports to the US have been reduced to 18% with immediate effect. In return, India has committed to lowering tariffs and certain non-tariff barriers on select American goods. The move is expected to restore competitiveness for Indian exporters who had been grappling with sharply higher business costs in the US market.
The impact of elevated tariffs had been visible over much of 2025. India’s gems and jewellery exports to the US declined sharply during April–December 2025, falling 44.42% year-on-year to $3.86 billion, compared with $6.95 billion in the same period a year earlier. The pressure intensified towards the end of the year, with December 2025 exports dropping more than 50% year-on-year, reflecting both tariff-related challenges and a slowdown in discretionary consumer spending in the US.
The tariff hike had effectively doubled duties on Indian gems and jewellery shipments to the US, raising serious concerns over pricing competitiveness. In FY25, India exported close to $10 billion worth of gems and jewellery to the American market, with diamonds alone contributing an estimated $7–8 billion. With margins already under pressure due to volatile input prices and soft global demand, the higher duties placed additional strain on exporters, particularly small and mid-sized firms.
India’s heavy dependence on the US market had prompted industry-wide discussions on the need for faster export diversification. Gems and jewellery rank as India’s third-largest export category to the US, after engineering goods and electronics, and the sector supports millions of jobs across manufacturing clusters in Gujarat, Maharashtra, Rajasthan and West Bengal. Industry bodies had warned that prolonged high tariffs could lead to shipment deferments, inventory pile-ups, workforce rationalisation and financial stress for smaller exporters operating on limited working capital.
In response, exporters have increasingly turned their focus towards alternative markets in the Middle East, Europe and Asia. The industry has also been looking to recently concluded and ongoing free trade agreements (FTAs) to improve market access and reduce duty barriers. Trade pacts with countries such as the UK, Oman and New Zealand, along with negotiations underway with several other partners, are seen as critical to strengthening India’s long-term export resilience.
The Gem & Jewellery Export Promotion Council (GJEPC) has reiterated that India’s expanding network of trade agreements could play a key role in mitigating market-specific risks. In a recent note, the council had said it remains confident that “ongoing and future trade agreements will help open new markets and reinforce India’s global standing built on quality, value and trust.”
Welcoming the latest development, Kirit Bhansali, Chairman, GJEPC, said, “The US-India Trade deal offers vital relief to India’s gem and jewellery sector amid U.S. tariff pressures. The U.S. accounts for 31% ($ 9.23 billion) of FY 2024–25 exports—India’s largest market. Tariff cuts lower costs for U.S. importers, provides immense relief to diamond jewellery manufacturers, to boost competitiveness of Indian diamond jewellery, revive demand, and stabilize operations. GJEPC is optimistic that based on India signing the trade deal, loose diamonds and coloured gemstones from India will get the benefit of zero duty imports in USA vide Annexure 3 of the U.S. reciprocal tariff list, providing much-needed support for diamond exports. This will enhance trade flows, rebuild confidence, and deliver a strong sector-wide boost.”
He added that the GJEPC continues consultations with the Government, and detailed notifications are awaited.
On the immediate impact for manufacturers, Sanjay Kumar Sanghi, Managing Director, Sanghi Jewellery said, “The reduction of U.S. tariffs from 25% to 18% is a positive step for Indian jewellery manufacturers, as it restores some pricing competitiveness in a key export market. It should help revive postponed orders and improve engagement with U.S. buyers. Over the coming months, we expect a gradual pickup in volumes, better capacity utilisation, and more stable margins for manufacturers.”
Explaining what the move means for India’s export positioning in the U.S., Khushboo Ranawat, Director, Swarn Shilp Chains & Jewellers noted, “The U.S. is India’s largest jewellery export market, contributing nearly 30% of our total exports. The reduction in tariffs from 25% to 18% offers much-needed relief after a period of margin pressure and slower order inflow. Lower landed costs will improve competitiveness and should gradually revive enquiries and new orders in the coming months as buyer confidence stabilises. Independent analysts also point out that India will now be more competitive against rivals like China, which faces higher average tariffs, enhancing our share in the U.S. market.”
Meanwhile, the All India Gem and Jewellery Domestic Council (GJC) has also welcomed the lowering of US tariffs. “The reduction in US tariffs marks a pivotal moment for India’s gems and jewellery sector. By lowering barriers in one of the largest consumer markets, our exporters will gain a stronger foothold, while our artisans will see their creations reach new audiences. This strengthens our global competitiveness and instils confidence across the supply chain, from manufacturers to retailers. With this opportunity, Indian jewellery will shine brighter than ever, not only as a product but as a cultural symbol of excellence,” said Rajesh Rokde, Chairman, GJC.
“The slash in US tariffs will directly benefit small and medium enterprises, which form the backbone of India’s jewellery industry. This reduction opens doors for thousands of smaller businesses to expand into the US market, translating into higher exports, stronger revenues, and most importantly, job creation at the grassroots level. This deal empowers entrepreneurs, artisans, and family-run businesses to compete globally on fairer terms,” commented Avinash Gupta, Vice Chairman, GJC.
With tariff pressures now easing in the US, exporters are cautiously optimistic that shipment volumes could stabilize in the coming months, providing much-needed relief to one of India’s leading export sectors.
Retail Jeweller India News
