Key Highlights
- India continues to face a 10% U.S. tariff under the new Section 301 regime.
- India secures a lower tariff band than several competing manufacturing and trading hubs.
- Indian exporters gain a 2.5 percentage-point tariff advantage over countries including China, Hong Kong, Thailand and Vietnam.
- GJEPC rejects any link between India’s gem and jewellery sector and forced labour.
- The Council seeks an early India–U.S. Bilateral Trade Agreement to bridge the remaining tariff gap.
- Natural diamonds and coloured gemstones remain key priorities for tariff relief, according to GJEPC.
India’s gem and jewellery export sector will continue to face an additional 10% U.S. tariff under the newly implemented Section 301 tariff regime. However, the country has secured placement in the lower tariff band compared with several competing manufacturing and trading hubs, according to the Gem & Jewellery Export Promotion Council (GJEPC).
The new U.S. tariff framework came into effect on 24 July 2026, replacing the temporary Section 122 balance-of-payments surcharge. While the additional tariff on Indian gem and jewellery exports remains unchanged at 10%, India has been placed in the lower tariff category after adopting measures prohibiting imports produced with forced labour.
According to GJEPC, this gives Indian exporters a 2.5 percentage-point tariff advantage over competing manufacturing and trading centres including China, Hong Kong, Thailand, Türkiye, the UAE, Israel and Vietnam, which are now subject to a 12.5% additional tariff on exports to the United States.
Commenting on the development, Shri Kirit Bhansali, Chairman, GJEPC, said:
“At the outset, we categorically reject any implication that India’s gem and jewellery sector is linked to forced labour. Repeated studies have been commissioned that demonstrates the industry’s long-standing commitment to responsible sourcing, worker welfare, and ethical business practices. We also welcome the Government of India’s recent amendment to the Foreign Trade Policy that bars the import of goods produced, wholly or partly, with forced labour—an important step that reinforces India’s commitment to human rights and aligns our trade rules with internationally accepted labour standards.
So imposing of 10% U.S. tariff under the new Section 301 regime, which is not at all justified, remains a challenge for India’s gem and jewellery exports, particularly as key competing trading centres in diamond continue to enjoy duty-free access for natural diamonds. While India’s placement in the lower tariff band offers some relative competitiveness in terms of jewellery, bridging the remaining tariff gap through an early India–U.S. Bilateral Trade Agreement and securing tariff relief for natural diamonds and coloured gemstones as provided to countries like EU and Malaysia remain our key priorities.”
Key Challenges Highlighted by GJEPC
GJEPC noted that while India has secured a competitive tariff advantage over several countries, significant challenges remain. Natural diamonds exported through Belgium continue to enjoy zero additional U.S. tariff, while comparable Indian-origin diamonds attract the additional 10% duty. In addition, jewellery exports from India continue to attract the existing Most Favoured Nation (MFN) duty of 5.5%–6%, resulting in an effective import duty of approximately 15.5%–16% after the Section 301 tariff is applied. Lab-grown diamonds and synthetic stones also remain covered under the additional tariff.
GJEPC Seeks Early Bilateral Trade Agreement
The Council has reiterated that natural diamonds and coloured gemstones, being essential raw materials for jewellery manufacturing, should be considered for exemption from the additional tariff. GJEPC said it is actively engaging with the Government of India to pursue an early India–U.S. Bilateral Trade Agreement (BTA) aimed at narrowing the tariff gap and strengthening the global competitiveness of India’s gem and jewellery exports.
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