US Section 301 Tariff Pressures Indian Gems Exports

India still holds a tariff advantage over countries such as China, Hong Kong, Thailand, Türkiye, the UAE, Israel and Vietnam, which face a higher additional tariff of 12.5%. The effective import duty on jewellery exports from India now stands at approximately 15.5%–16%, combining the existing US MFN duty of 5.5%–6% with the new 10% Section 301 tariff. Lab-grown diamonds and synthetic stones are also subject to the 10% additional tariff.

GJEPC Chairman Kirit Bhansali said the 10% tariff is not justified and remains a challenge for India's gem and jewellery exports, particularly as competing diamond trading centres enjoy duty-free access. India's placement in the lower tariff band provides some relative competitiveness for jewellery exports, he added. Bhansali said bridging the remaining tariff gap through an early India-US Bilateral Trade Agreement (BTA) and securing tariff relief for natural diamonds and coloured gemstones remain key priorities.

The council rejected any suggestion that India's gem and jewellery sector is linked to forced labour and welcomed the government's recent amendment to the Foreign Trade Policy prohibiting imports of goods produced wholly or partly with forced labour. “The council is actively engaging with the government to pursue an early India–US Bilateral Trade Agreement (BTA) to bridge the tariff gap and enhance the competitiveness of India’s gem and jewellery exports in the US market,” the statement said.