US duty cut to benefit gem, jewellery exports

Sat Feb 21 2026

The US Supreme Court’s decision to strike down President Donald Trump’s unilateral tariff has come as a major relief for the gem and jewellery industry reeling under weak demand amid high gold prices.

The export duty on gem and jewellery industry will come down to 10 per cent from the prevailing 18 per cent and make exports from India more attractive.

Last August, the US imposed a 60 per cent trade tariff on many Indian goods, including gems and jewellery comprising a 10 per cent base, 25 per cent reciprocal and 25 per cent additional duty. The high duty applies to polished diamonds, gemstones and finished jewellery and severely impacted both exports and margins. However, trade negotiations recently has bought the duty to 18 per cent.

The gem and jewellery exports from India in first 10 months of this fiscal was down one per cent at $23.19 billion, largely due to tariff of about 60 per cent levied by the US.

During this period, exports to India’s biggest market, the United Arab Emirates, increased by 24 per cent, while exports to Hong Kong increased by 33 per cent. There was over 36 per cent growth in exports to Australia and France.

Colin Shah, MD, Kama Jewelry said the US SC verdict will address the demand supply vacuum that was created due the duties levied earlier as exporters were finding it difficult to maintain trade given the steep tariff rates.

While the new development is a change in the paradigm, it is also true that exporters still have to walk a tight rope. The positive aspect is that non-exempt finished jewellery categories will continue to experience pressures on costs. Exporters will have to be more astute in their planning, scheduling and classification to avoid any unnecessary hassles, he added. Anil Rego, Founder and Fund Manager at Right Horizons PMS said the steep reduction in duties from earlier levels of about 50 per cent to 10 per cent along with zero-duty access for specific categories such as silk and diamonds meaningfully enhances cost competitiveness in the sizeable US market.

At a sector level, textiles and gems and jewellery stand out as the most direct and near-term gainers from the easing of tariffs, he said.

“We believe markets will closely track the durability of the framework and the trajectory of bilateral trade discussions before assigning a sustained re-rating to trade-exposed sectors,” he added.

Source: https://www.thehindubusinessline.com/