Export of jewellery and gems set to face tariff grind-down

Cut and polished diamonds accounted for 57% of India's total gems and jewellery exports to the US in FY24

- Srushti Vaidya

The US government's decision to impose a 27% reciprocal tariff on imports from India is expected to significantly impact the country's gems and jewellery sector, experts said. Gems and jewellery made up 12.8% of India's exports to the US and amounted to $9.9 billion in FY24.

US President Donald Trump announced the new tariff on 2 April, which he said is about half the rate of India's 54% tariff on US imports. The current US duty for Indian gold jewellery imports is 5%, per a note from EY, and there are no duties on import of cut and polished diamonds.

Garments, engineering goods, electronics, pharmaceuticals, and gems and jewellery comprised 72.7% of total goods trade between India and the US in FY24, contributing $56.34 billion out of the overall trade of $77.52 billion.