The Indian diamond sector is preparing for potential hikes in US duties from next week, with efforts underway to thwart the plans amid concerns about their impact.
Industry members expect the US to place tariffs on jewelry and loose polished diamonds as part of the Donald Trump administration’s broad reciprocal measures, which would go into effect from April 2.
The Gem & Jewellery Export Promotion Council (GJEPC) held a meeting for industry members on Tuesday to explain the situation and outline the work it was doing to minimize the effect.
Diamond manufacturers have expressed concern about the levies, as the US is India’s top export market for polished. As of Wednesday, they had no clarity about what the tariff rates would be and how they would affect shipments via other locations.
Loose diamonds from India do not currently attract any import duty on entry to the US, while gold jewelry incurs between 5.5% and 7%.
A report last month by India’s Global Trade Research Initiative estimated a tariff hike of 13.3% for exports of diamonds, gold and silver into the US. It based this on the two countries’ “tariff gap” — the average difference between India’s import duties on US goods in those categories and the equivalent tariffs in the opposite direction.
India charges 5% import duty on polished diamonds and 20% on jewelry from gold, silver and platinum. The GJEPC has long been lobbying to reduce these rates.
But industry participants warned that nothing would be certain until there was an official announcement.
“If the US implements a reciprocal tariff policy on India on April 2, India’s exports of gems and jewelry — particularly studded gold jewelry and cut and polished diamonds — will be largely impacted,” said GJEPC chairman Kirit Bhansali in a statement to Rapaport News on Wednesday.
The GJEPC has raised its concerns with the Indian government about the impact on jobs and asked it to “ensure that a mutually agreeable solution is reached to safeguard India’s gem and jewelry exports” to the US, Bhansali added.
“We have recently talked with our US counterparts also and [asked] them to lobby with [the] US government, as a large number of retailers and jobs are dependent on Indian supplies there,” he continued.
There were reports of a large Indian diamond manufacturer urging US clients to complete purchases before tariffs came in. Competitors dismissed this as a marketing gimmick, noting that customers would only expediate their buying in a very small number of cases.
India exported $6.69 billion worth of polished diamonds to the US on a gross basis in 2024, according to Rapaport archives based on data from the United States International Trade Commission.
Image: Polished diamonds. (Shutterstock)
